Which of the following statements is false regarding an assumption of inventory cost flow?
a. The cost flow assumption need not correspond to the actual physical flow of goods.
b. The assumption selected may be changed each accounting period.
c. The FIFO assumption uses the earliest acquired prices to cost the items sold during a period.
d. The LIFO assumption uses the earliest acquired prices to cost the items on hand at the end of an accounting period.
Answer: b. The assumption selected may be changed each accounting period.
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All the statements below are true about legitimate power EXCEPT:
A) it can be a very weak form of power if used ineffectively. B) people with legitimate power have an organizational title. C) people with legitimate power have the right to ask others to do things that are within the scope of their authority. D) people with legitimate power have a desire to identify and be associated with a specific individual. E) the higher up in an organization a person is, the more legitimate power he or she generally possesses.
The Halpert Group produces a single product selling for $70 per unit. Variable costs are $7 per unit and total fixed costs are $5,000. What is the contribution margin ratio?
A) 10% B) 63% C) 90% D) 111%