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NEW QUESTION 50
Using absorption costing, fixed manufacturing overhead costs are best described as:

• A. Indirect product costs.
• B. Indirect period costs.
• C. Direct period costs.
• D. Direct product costs.

Answer: A

Explanation:
Using absorption costing, fixed manufacturing overhead is included in inventoriable product) costs. Fixed manufacturing overhead costs are indirect costs because they cannot be directly traced to specific units produced.

NEW QUESTION 51
Of the following, the greatest advantage of a database server) architecture is:

• A. Conversion to a database system is inexpensive and can be accomplished quickly.
• B. Multiple occurrences of data items are useful for consistency checking.
• C. Backup and recovery procedures are minimized.
• D. Data redundancy can be reduced.

Answer: D

Explanation:
Data organized in files and used by the organization's various applications programs are collectively known as a database. In a database system, storage structures are created that render the applications programs independent of the physical or logical arrangement of the data. Each data item has a standard definition, name, and format, and related items are linked by a system of pointers. The programs therefore need only to specify data items by name, not by location. A database management system handles retrieval and storage. Because separate files for different applications programs are unnecessary, data redundancy can be substantially reduced.

NEW QUESTION 52
Company P, which produces computers, uses a target pricing and costing approach. The following is Company P's costs and revenues for the year just ended:

Company P plans to increase sales of computers to 15,000 in the next year by reducing the unit price to US $1,250. If Company P wishes to achieve a unit target operating income of 10%, by what amount must it reduce the full cost per unit?

• A. US $100
• B. US $125
• C. US $225
• D. US $250

Answer: C

Explanation:
Unit target operating income is US $125 10% $1,250 target price). Thus, the unit target full cost is US $1,125 $I,250 $125). The current full cost per unit is US $1,350 [($8,000,000 cost of goods sold + $5,500,000 operating costs excluding production) - 10,000 units sold], so the necessary reduction in full cost per unit is US $225 $1,350 - $1 .125).

NEW QUESTION 53
The practice of maintaining a test program library separate from the production program library is an example of:

• A. A concurrency control.
• B. An organizational control.
• C. Physical security.
• D. An input control.

Answer: B

Explanation:
This separation is an organizational control. Organizational controls concern the proper segregation of duties and responsibilities within the information systems department.
Although proper segregation is desirable, functions that would be considered incompatible if performed by a single individual in a manual activity are often performed through the use of an information systems program or series of programs. Thus, compensating controls may be necessary, such as library controls, effective supervision, and rotation of personnel. Segregating test programs makes concealment of unauthorized changes in production programs more difficult.

NEW QUESTION 54
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