Table 5.3 -Table 5.3 Presents the Cost Schedule for Candy's Cakes. If

question 178

Multiple Choice

Table 5.3
-Table 5.3 presents the cost schedule for Candy's Cakes. If Candy produces two cakes, Candy's marginal cost is

• A) $0.
• B) $20.
• C) $25.
• D) $50.

Differentiate between single and multiple overhead rate systems and their impact on cost accuracy.

Identify the components that make up manufacturing overhead and understand their variable and fixed nature.

Calculate the application of manufacturing overhead to specific jobs and understand the impact on job costing.

Understand the role and computation of a bill of materials in manufacturing.

---

Definitions:

Accounts Payable Period

The time it takes for a company to pay off its suppliers after a purchase is made, typically measured in days.

Liberal Accounts Receivable Policy

A policy that involves offering lenient credit terms to customers, such as extended periods before payment is due, which can encourage sales but may increase the risk of bad debts.

Operating Cycle

The period it takes for a business to buy inventory, sell products, and collect cash from sales, reflecting the efficiency of a company’s operations.

Inventory Period

The average number of days that a company holds its inventory before selling it, indicating the efficiency of its inventory management.