Indicate whether each of the following statements about responsibility centers is true or false.A responsibility center controls identifiable revenue or expense items.To be designated as a responsibility center, a department need not be a large segment of an organization.A cost center generates revenues and expenses.Investment centers are commonly found at upper levels of the organization chart.The manager of a profit center is evaluated based primarily on his/her ability to control costs.
What will be an ideal response?
A responsibility center controls identifiable revenue or expense items. T
To be designated as a responsibility center, a department need not be a large segment of an organization. T
A cost center generates revenues and expenses. F
Investment centers are commonly found at upper levels of the organization chart. T
The manager of a profit center is evaluated based primarily on his/her ability to control costs. F
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The gross profit of Larry Company for 2015 is $300,000, cost of goods manufactured is $400,000, the beginning inventories of goods in process and finished goods are $28,000 and $35,000, respectively, and the ending inventories of goods in process and finished goods are $50,000 and $70,000, respectively. The cost of goods sold of Larry Company for 2015 must have been
A) $378,000. B) $265,000. C) $278,000. D) $365,000.
Answer the following statements true (T) or false (F)
1) Credit department employees must have access to cash in order to exercise effective internal control over receivables. 2) Separation of cash-handling and cash-accounting duties is a critical element of internal control over receivables. 3) The employees who handle cash know how customers pay and thus are in the best position to grant credit to customers. 4) Businesses must maintain a single Accounts Receivable control account regardless of the number of customers. 5) Separate customer accounts receivable are called subsidiary accounts.
An unsecured bond is the same as a
a. term bond. b. zero coupon bond. c. debenture bond. d. bond indenture.
Eichholtz Company uses 10,000 units of a part in its production process. The costs to make a part are: direct material, $12; direct labor, $25; variable overhead, $13; and applied fixed overhead, $30 . Eichholtz has received a quote of $55 from a potential supplier for this part. If Eichholtz buys the part, 70 percent of the applied fixed overhead would continue. Eichholtz Company would be better
off by a. $50,000 to manufacture the part. b. $150,000 to buy the part. c. $40,000 to buy the part. d. $160,000 to manufacture the part.