Separating the Shipping and Billing Functions Is Designed to Reduce

question 88

Multiple Choice

Separating the shipping and billing functions is designed to reduce the threat of

• A)failure to bill customers.
• B)billing customers for wrong quantities.
• C)billing customers before merchandise has been shipped.
• D)shipping the wrong merchandise.

---

Definitions:

Overhead Cost

Expenses related to the day-to-day running of a business that are not directly linked to a specific product or service but are necessary for the business to operate.

Activity Rates

The specific costs associated with particular business activities, measured to allocate resources or assess performance.

Direct-Labor-Hours

The total hours worked by employees that are directly involved in the manufacturing process.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead costs to products, calculated before the production period begins based on estimated costs and activity levels.