Janet Is the Purchasing Agent at Frameco Manufacturing

question 19

Multiple Choice

Janet is the purchasing agent at Frameco Manufacturing. Her duties include vendor selection and ordering materials. Due to a recent economic downturn and resulting cut backs, Janet has been assigned the additional duty or preparing receiving reports after comparing the goods received to the purchase order. This is an example of:

• A)unlimited access to materials.
• B)independence of assigned functions.
• C)misappropriation of assets.
• D)a lack of segregation of duties.

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Definitions:

Contribution Format

An income statement format that separates fixed and variable costs and expenses, used to determine contribution margin.

Least-squares Method

A statistical technique used to determine the line of best fit by minimizing the sum of the squares of the differences between the observed values and the values predicted by the line.

Mixed Cost

Expenses that have both fixed and variable components, changing with levels of production but not in direct proportion.

Variable Cost

A cost that varies with the level of output or sales, such as materials or commissioned labor.