A learning curve of 80% assumes that the incremental unit time is reduced by 20% for each doubling of output. Also, direct labor cost is proportionate to time worked. What is the incremental direct labor cost of the 16th unit produced as an approximate percentage of the first unit produced?

• A.41%
• B.31%
• C.51%
• D.64%

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The two broad groupings of information systems control activities are general controls and application controls. General controls include controls:

• A.Relating to the correction and resubmission of faulty data.
• B.For developing, modifying, and maintaining computer programs.
• C.Designed to assure that only authorized users receive output from processing.
• D.Designed to ensure that all data submitted for processing have been properly authorized.

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An organization engages in questionable financial reporting practices due to pressure to meet unrealistic performance targets. Which internal control component is most negatively affected?

• A.Control environment.
• B.Monitoring.
• C.Risk assessment.
• D.Control activities.

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Which of the following most appropriately describes the classification and behavior of shipping costs?

• A.Option A
• B.Option B
• C.Option C
• D.Option D

Correct Answer: B

Using the high-low method, the variable and fixed costs for shipping can be calculated. The difference in cost levels divided by the difference in unit volume equals the variable cost per unit of US $1.40 [ $1 14,000 $93,000) - 70,000 - 55,000)]. The variable cost for 70,000 units is US $98,000 70,000 x $1 40). Subtracting the variable cost from total shipping cost results in the fixed cost of US $16,000 $114,000 - $98,000). A company wants to determine its marketing costs for budgeting purposes. Activity measures and costs incurred for 4 months of the current year are presented in the table below. Advertising is considered to be a discretionary cost. Salespersons are paid monthly salaries plus commissions. The sales force was increased from 20 to 21 individuals during the month of May.

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Which stage in the industry life cycle is characterized by many different product variations?

• A.Introduction.
• B.Decline.
• C.Growth.
• D.Maturity.

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