Which of the Following Statements Is True About the Audit

question 97

Multiple Choice

Which of the following statements is true about the audit approach?

• A)Key indicators and customer satisfaction measures are important in this approach.
• B)This approach deals with the determination of the impact of the dollar value.
• C)It involves the use of statistics and finance and hence it is more demanding.
• D)It uses utility analysis to estimate the financial impact of the employee behavior.
• E)It determines whether the introduction of a program or practice has the intended effect.

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Definitions:

Overapplied

Refers to a situation where the amount of overhead allocated to products exceeds the actual overhead incurred, creating an overapplied balance.

Underapplied

A situation where the allocated manufacturing overhead costs are less than the actual overhead costs incurred, leading to a discrepancy in accounting records.

Cost of Goods Sold

Expenditures directly tied to the fabrication of merchandise a company trades.

Manufacturing Overhead Applied

The portion of manufacturing overhead costs allocated to individual units of production based on a predetermined overhead rate.