Kinetic Company estimates that overhead costs for the next year will be $1,600,000 for indirect labor and $400,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 50,000 direct labor hours are planned for this next year, then the plantwide overhead rate is $.025 per direct labor hour.
Answer the following statement true (T) or false (F)
False
($1,600,000 + $400,000)/50,000 direct labor hours = $40 per direct labor hour
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In making judgments about the effect of the internal auditors' work on the external auditor's procedures in specific audit areas, which of the following is not one of the issues related to the specific audit areas that is considered by the external auditor?
a. Materiality of the financial statement amounts. b. Risk of material misstatement of the assertions related to these financial statement amounts. c. Degree of subjectivity involved in the evaluation of the audit evidence gathered in support of the assertions. d. All of the above are considered by the auditor.
Dan arranged for his bank to wire $50 on the first of each month to the YMCA. The money was to pay for his membership. In April, the bank wired $50 to Young Machine Company of America, instead of the YMCA. Which statement is correct?
a. Dan, the originator, is liable for the amount of the payment. b. Dan's Bank is liable for the full amount of the payment. c. The prior Bank is liable for the full amount of the payment. d. Dan and the bank share liability for the amount of the payment.
A security interest that provides for a security interest in collateral subject to future advances is a floating lien
Indicate whether the statement is true or false
Which of the following is a true statement with regard to the line and staff organizational structure?
A. Line managers readily accept the activities performed by staff employees. B. The activities of the staff employees support the activities of the line employees. C. The activities of the line employees support the activities of the staff employees. D. The line and staff organizational structure is very time consuming.