Two Projects Are Considered to Be Independent If

question 6

Multiple Choice

Two projects are considered to be independent if

• A) selecting one would have no bearing on accepting the other.
• B) their cash flows are unrelated.
• C) Both a and b
• D) None of the above

---

Definitions:

Standard Costing System

An accounting system that estimates the cost of products by assigning predefined costs to materials, labor, and overhead.

Machine-hours

A measure of the amount of time a machine is operated, used as a basis for allocating manufacturing overhead costs to products.

Total Variable Overhead Spending Variance

The difference between the actual variable overhead costs incurred and the expected (budgeted) variable overhead costs based on actual production levels.

Variable Overhead Efficiency Variance

The difference between the standard cost of variable overheads allocated for production and the actual cost incurred.