An Employee Who Makes a Sale, Ships the Goods, and Bills

question 69

Multiple Choice

An employee who makes a sale, ships the goods, and bills the customer violates which control activity?

• A)authorization of transactions and activities
• B)documentation
• C)segregation of duties
• D)human resource controls

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Definitions:

Variable Cost Method

A cost-plus method of pricing setting in which only the variable costs are included in the cost amount to which the markup is added.

Fixed Manufacturing Costs

Expenses that do not change with the level of production, such as rent, salaries of permanent employees, and depreciation of factory equipment.

Markup

The extra charge added to the purchasing cost of items to encompass both overhead expenses and profit, setting the sale price.

Contribution Margin

The excess of sales over variable costs; the excess of manufacturing margin over variable selling and administrative expenses.