The Organization Chart for Renata Corporation Includes a Controller and an Information

question 72

Multiple Choice

The organization chart for Renata Corporation includes a controller and an information processing manager,both of whom report to the vice president of finance.Which of the following would be a control weakness?

• A)Assigning the programming and operating of the computer system to an independent control group which reports to the controller
• B)Providing for maintenance of input data controls by an independent control group which reports to the controller
• C)Periodically rotating assignment of application processing among machine operators,who all report to the information processing manager
• D)Providing for review and distribution of system-generated reports by an independent control group which reports to the controller

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Definitions:

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders and is typically based on direct labor hours, direct labor costs, or machine hours.

Machine-Hours

A measure of production activity that quantifies the amount of time machines are used to produce goods.

Total Manufacturing Cost

The total expenses directly related to the manufacture of products, encompassing the price of raw materials, wages for direct labor, and indirect manufacturing costs.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual jobs or units based on a certain activity base, such as labor hours or machine hours, calculated before the period begins.