Jimmy Has in His Backyard a Swimming Pool in Which

question 27

Multiple Choice

Jimmy has in his backyard a swimming pool in which he raises several dangerous species of sharks.The pool does not have a fence around it and neighborhood children frequently visit to watch the sharks without Jimmy's permission.Billy, a 16 year old, made a bet with several of the neighborhood children that he could swim the length of the pool without being injured by the sharks.Billy lost the bet.Now Billy sues Jimmy for his injuries.

• A)Billy can recover because he is a child trespasser.
• B)Billy can recover because he is a licensee.
• C)Billy can recover because he is an invitee.
• D)None of the above.

Acknowledge the limitations of relying exclusively on past cost data for setting standards.

Differentiate between ideal and currently attainable standards.

Recognize the comprehensive scope of standards beyond just direct labor and materials.

Understand the concept and purpose of standard costs in business operations.

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Definitions:

Absorption Costing

A financial methodology that includes every cost related to producing a product—direct materials, direct labor, and both kinds of overhead expenses (variable and fixed), into the product’s final cost.

Ending Finished Goods

Ending Finished Goods are the inventory of completed products that are available for sale at the end of an accounting period.

Net Operating Income

This is the profit a company makes from its operations, after all operating expenses have been subtracted from revenues but before taxes and interest are deducted.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much revenue is contributing to fixed expenses and net income.