If the manufacturing company uses the FIFO first-in, first-out) method, the equivalent units for conversion costs in Department 2 for the current month would be:

• A.72,500
• B.74,000
• C.85,200
• D.86,600

Correct Answer: B

The FIFO method distinguishes between work done in the prior period and work done currently. The total FIFO equivalent units equals the work done currently on beginning work-in-process, plus the work done on ending work-in-process, plus all units started and completed currently. Hence, total FIFO equivalent units equals 740001 10% x 14,000 units in BWIP) + 60% x 8,500 units in EWIP) + [100% 81,500 spoiled and transferred - 14,000 units in BWIP)] A company harvests, packs, and ships all of its own produce. The company operates three packing lines. A summary of completed inventory costs is as follows:

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A contractual arrangement that gives the owner the right to buy or sell an asset at a fixed price at any moment in time before or on a specified date is a(n):

• A.European option.
• B.Foreign option.
• C.Future option.
• D.American option.

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Assume that C Company offers to perform the operation 2 function on 1,000 units at a unit price of US $40, excluding direct materials cast. Also assume that Y Company offers to perform the Operation 1 function an 1,000 units at a unit price of US $7, excluding direct materials cost. Which of these mutually exclusive offers is acceptable?

• A.C but not Y.
• B.Y but not C.
• C.X or Y.
• D.Neither offer should be accepted.

Correct Answer: A

KG's offer should be accepted because its cast is US $40,000 1,000 units x $40), but the increase in throughput contribution is US $72,000 [1,000 units $120 unit price - $48 E' 1 per unit)]. Hence, the relevant cost of QC's offer is less than the incremental throughput contribution. ms's offer effectively increases the capacity of the bottleneck operation. Y's offer should be rejected because, even though its US $7 unit price is less than the US $8 unit operating cost excluding direct materials) for Operation 1. it will result in the incurrence of additional casts with no increase in throughput contribution, given that Operation 2 is already producing at its 150,000-unit capacity.

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When a manager generalizes from the evaluation of one or a few traits to the employee's total performance, she has made:

• A.A judgmental evaluation.
• B.An evaluation subject to the halo effect.
• C.A projection.
• D.An objective evaluation

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Which of the following is true regarding an organization's relationship with external stakeholders?

• A.Legal representation should be consulted before releasing internal audit information to other assurance providers.
• B.Specific guidance must be followed when interacting with nongovernmental organizations.
• C.Disclosure laws tend to be consistent from one jurisdiction to another.
• D.There are several internationally recognized standards for dealing with financial donors.

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