When Testing a Standard Cost System,the Auditor Does Not Normally

question 41

Multiple Choice

When testing a standard cost system,the auditor does not normally make which of the following inquiries?

• A)The method for developing standard costs.
• B)The method for identifying components of overhead and of allocating overhead to products.
• C)The method for identifying sales cutoff.
• D)The method used for allocating variances to inventory and cost of goods sold.

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Definitions:

Fit Best Method

The Fit Best Method refers to the process of adjusting a model's parameters so that it best fits a given set of data.

Point-intercept Method

A technique in ecology used for estimating the abundance or cover of plant species by recording their presence at points along a transect line.

Strong Linear Relationship

A statistical term indicating a direct proportional relationship between two variables, where changes in one variable directly correspond to changes in the other.

Negative Linear Relationship

A type of correlation where one variable increases as the other decreases in a consistent, straight-line manner.