Which of the Following Would an Auditor Most Likely Question

question 33

Multiple Choice

Which of the following would an auditor most likely question included in calculation of the overhead rate for a company that manufactures a product?

• A)Factory supervisor salary.
• B)Indirect materials.
• C)Machine hours.
• D)Selling expense.

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Definitions:

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often justifying government intervention.

Government Failure

Situations where government intervention in the economy creates inefficiencies or worsens outcomes.

Efficient Allocation

The optimal distribution of resources among competing entities to achieve the desired outcomes with minimal waste or inefficiency.

Government Failure

Occurs when government intervention in the economy causes more harm than good, leading to inefficiencies or unintended negative consequences.