Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following statements about the labor rate variance is correct?

The labor rate variance is only relevant in managerial accounting, not in cost accounting.

The labor rate variance is calculated by multiplying the standard rate by the difference between actual and standard hours worked.

The labor rate variance measures the productivity of direct labor.

The labor rate variance measures the difference between the actual hourly wage rate paid and the standard rate, multiplied by the actual hours worked.

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Verified step by step guidance

Understand the concept of labor rate variance: It measures the difference between the actual hourly wage rate paid and the standard hourly wage rate, multiplied by the actual hours worked.

Identify the formula for labor rate variance: Labor Rate Variance = (Actual Rate - Standard Rate) × Actual Hours Worked.

Clarify the components of the formula: 'Actual Rate' refers to the hourly wage actually paid to workers, 'Standard Rate' refers to the predetermined hourly wage rate, and 'Actual Hours Worked' refers to the total hours worked by labor during the period.

Analyze the incorrect statements: The labor rate variance is relevant in both managerial and cost accounting, it is not calculated using the difference between actual and standard hours worked, and it does not measure productivity but rather wage rate differences.

Conclude with the correct statement: The labor rate variance measures the difference between the actual hourly wage rate paid and the standard rate, multiplied by the actual hours worked.