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NEW QUESTION 20
A manufacturing company is setting a standard number of labor hours for a product Management creates a draft standard and asks for employees' feedback. Which one of the following statements best represents the type of standard that is being set?

• A. An authoritative standard because management still will ensure the standard fits the strategy
• B. An authoritative standard because the employees helped to determine the standard
• C. A participative standard because It includes management's Input to determine the standard.
• D. A participative standard because the employees will more likely view the standard as reasonable.

Answer: D

NEW QUESTION 21
GorCo anticipates 10% sales growth each month for the next three months, and plans to sell 120.000 units of finished goods In the first month. The company plans production so that ending inventory is equal to 5% of the next month's budgeted sales On GorCo's production budget for the second month the number of finished goods units to be produced would be

• A. 131,340.
• B. 132,000.
• C. 132,660.
• D. 132,600.

Answer: C

NEW QUESTION 22
MJC Co. is considering adopting a variable costing system using variable costing rather than absorption costing will be more advantageous to MJC because the variable costing system

• A. assigns all costs of manufacturing to products in order to properly match cost of production with revenues
• B. focuses on gross profit as the best indicator of a company's ability to cover its expenses
• C. more readily provides data needed for cost/volume/profit analyses done by management
• D. allows the financial statements released to internal users to agree with the GAAP financial statements issued for external use

Answer: C

NEW QUESTION 23
A company's controller is preparing to allocate service department costs. The controller would like to use a cost allocation method that would be most accurate. The method the controller would most likely use is the

• A. step-down method
• B. direct method
• C. reciprocal method
• D. dual allocation method

Answer: C

NEW QUESTION 24
Marsalis Products Inc. manufactures and sells batteries and cables for computers. The latest information on the products and their costs is shown in the following table.

Note: 1 Fixed manufacturing cost of S1.500,000 per year is allocated to products based on the number of machine hours required to produce the product at a rate of S3 per machine hour.
Based on the information above, what is the annual amount of earnings before interest and taxes (EBIT)?

• A. $2,960.000.
• B. $1,460,000.
• C. $2,920,000.
• D. $4,420,000.

Answer: B

NEW QUESTION 25
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