Oklahoma Chemicals Plans to Use Its Computers to Post Information

question 26

Multiple Choice

Oklahoma Chemicals plans to use its computers to post information from journals to the ledger instantaneously. One obvious benefit of this technology is:

• A) a reduction in the number of accountants required by the firm.
• B) less scrutiny from agencies such as the Internal Revenue Service.
• C) to shift financial decision making from people to programmed technology.
• D) readily available financial information.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted; it contributes towards covering fixed costs and generating profit.

Direct Labor

The wages paid to workers who physically produce products or are directly involved in providing services.

Fixed Manufacturing Overhead

The consistent expenses tied to manufacturing that do not vary with the level of production, such as salaries of managerial staff and depreciation of equipment.

Direct Labor

Direct labor refers to the work contributed by employees who are directly involved in the manufacturing or production process of goods or services.