If Global Data's Income Statement for 2018 Reports Interest Expense

question 114

Multiple Choice

If Global Data's income statement for 2018 reports interest expense of $25,200,then:

• A)Interest payable decreased by $16,800 in 2018.
• B)Interest payable increased by $16,800 in 2018.
• C)Interest payable at the end of 2018 amounts to $16,800.
• D)Either the amount reported in the income statement or the interest payment shown above must be incorrect.

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Definitions:

Labor Rate Variance

The difference between the actual labor rate paid and the standard labor rate expected, multiplied by the actual hours worked.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, reflecting efficiency in material use.

Variable Overhead Efficiency Variance

The difference between the actual hours taken to produce something and the standard hours expected, multiplied by the variable overhead rate.

Materials Price Variance

The difference between the actual cost of materials and the expected cost multiplied by the quantity of materials used.