You time someone completing a single task the first time at 120 minutes, and the second time they do the task it takes 108 minutes. You should use a 90 percent learning curve to estimate the length of time this worker will take to complete this task in the future.
Answer the following statement true (T) or false (F)
True
The time for the first unit is multiplied by the learning percentage to obtain the time for the second unit. Hence, the time for the second unit divided by the time for the first unit times 100 is the appropriate learning curve and 108/120 × 100 = 90 percent.
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Which of the following types of risk is of critical importance to auditors in performing tests of controls?
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Many day traders are also margin traders
Indicate whether the statement is true or false.
Feemster Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 5,900 units, but its actual level of activity was 5,850 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October:Data used in budgeting: Fixed element per monthVariable element per unitRevenue - $29.90 Direct labor$0 $5.60Direct materials 0 8.60Manufacturing overhead 37,000 1.30Selling and administrative expenses 27,200 0.80Total expenses$64,200 $16.30?Actual results for October: Revenue$176,095Direct labor$31,510Direct materials$49,800Manufacturing overhead$45,775Selling and administrative
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Fyodor Corporation has a Parts Division that does work for other Divisions in the company as well as for outside customers. The company's Machine Division has asked the Parts Division to provide it with 8,000 special parts each year. The special parts would require $19.00 per unit in variable production costs.The Machine Division has a bid from an outside supplier for the special parts at $27.00 per unit. In order to have time and space to produce the special part, the Parts Division would have to cut back production of another part-the QR4 that it presently is producing. The QR4 sells for $34.00 per unit, and requires $18.00 per unit in variable production costs. Packaging and shipping costs of the QR4 are $2.00 per unit. Packaging and shipping costs for the new special part would be
only $0.50 per unit. The Parts Division is now producing and selling 40,000 units of the QR4 each year. Production and sales of the QR4 would drop by 5% if the new special part is produced for the Machine Division.Required:a. What is the range of transfer prices within which both the Divisions' profits would increase as a result of agreeing to the transfer of 8,000 special parts per year from the Parts Division to the Machine Division?b. Is it in the best interests of Fyodor Corporation for this transfer to take place? Explain. What will be an ideal response?