Which of the Following Is an Example of the Type

question 83

Multiple Choice

Which of the following is an example of the type of analytical procedures that an auditor would use for inventory?

• A)Number of day's sales in receivables compared to industry averages.
• B)Inventory turnover for the previous five years.
• C)Days outstanding in accounts payable.
• D)Salaries of marketing personnel as a percent of total inventory.

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Definitions:

Supervisory Expense

Supervisory expense relates to the costs associated with the oversight and management of employees or production processes, often part of overhead costs.

Activity Rate

The predetermined rate used to allocate overhead costs to cost objects based on activities.

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities required to produce each product or service, aiming for more precise cost allocation.

Overhead Cost

All indirect costs associated with the operation of a business, including administrative expenses, depreciation, and utilities.