Which of the following inventory items would be the most frequently reviewed in an ABC inventory control system?

• A.Expensive, frequently used, high stock-out cost items with short lead times.
• B.Expensive, frequently used, low stock-out cost items with long lead times.
• C.Inexpensive, frequently used, high stock-out cost items with long lead times.
• D.Expensive, frequently used, high stock-out cost items with long lead times.

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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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An organization discovered fraudulent activity involving the employee time-tracking system. One employee regularly docked in and clocked out her co-worker friends on their days off, inflating their reported work hours and increasing their wages. Which of the following physical authentication devices would be most effective at disabling this fraudulent scheme?

• A.A requirement to clock in and clock out with a unique personal identification number.
• B.A combination of a smart card and a password to clock in and clock out.
• C.Radio-frequency identification chips to authenticate employees with cards.
• D.Face or finger recognition equipment,

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The errors cause the reported profit for the year ending Deg-ember 31. Year 4, to be:

• A.Overstated by US $72,000.
• B.Overstated by US $65,000.
• C.Understated by US $28,000.
• D.Understated by US $45,000.

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A company} is formulating its plans for the coming year, including the preparation of its cash budget. Historically, 30% of the company's sales are cash sales. The remaining 70% are credit sales with the following collection pattern.

Sales for the first five months of the coming year are forecast as follows.

For the month of April, the total cash receipts from sales and collections on account would be:

• A.US $3,729,968
• B.US $3,781,600
• C.US $4,025,200
• D.US $4,408,000

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