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NEW QUESTION 49
Explain whether ZFI's current overhead allocation method is appropriate.
Essay
Zhiliang Foods Inc. (ZFI) is a privately-held food distributor ZFI has two production departments' the Meat Department is labor-intensive. while the Bakery Department is highly automated ZFI applies a single overhead allocation rate, using the number of pounds produced as an allocation base for the whole company The expected annual overhead costs of ZFI for 100 million pounds produced are as follows (¥ in millions).
CMA-Financial-Planning-Performance-and-Analytics-2e3a8b82189d2c2e173e2ea4ad68978b.jpg
ZFI has one payroll administrator in its Human Resources department, but most of the payroll related work is outsourced to a payroll service provider ZFI's payroll administrator is responsible for tracking the list of current employees and maintaining the most up-to-date employee information, including bank accounts for payroll direct deposits.
Each pay period, the payroll administrator emails the information for all current employees' hours worked to the payroll service provider. The service provider then processes the payroll, makes direct deposits to employees' bank accounts, mails payroll stubs to employees' homes and emails payroll reports to ZFI's payroll administrator. The payroll administrator then makes payroll journal entries to ZFI's accounting system based on the payroll reports received ZFI's accountant prepares a bank reconciliation each month to ensure ZFI s payroll payments on ZFI's bank statement match the amounts shown on the payroll reports from the service provider.
ZFl's management is evaluating the purchase of data encryption software and human resources management software next year. The human resource management software is expected to provide various human resources and payroll-related functions.
In addition, the human resource software can generate a report to indicate the monthly employee turnover rate and the average service length of employees who have resigned. The system can also generate a report to indicate the main reasons for resignations and identify current employees who are at risk of resigning. The system will recommend actions to help retain these employees, such as more training opportunities or a pay raise.
Time Value Table
CMA-Financial-Planning-Performance-and-Analytics-cf9592d8b26999693539d125638022a5.jpg
CMA-Financial-Planning-Performance-and-Analytics-318ce8d2c91cf2c5dc5d51ba5c94cd80.jpg

Answer:

Explanation:
See the Answer below in Explanation details.
Explanation
The current overhead allocation method is not appropriate as both divisions are labour and machine intensive.
hence an appropriate overhead allocation basis would be labour and machine hours for the meat and bakery division rather than the number of output produce as this doesn't depict the actual usage of resources causing the overheads to be incurred

 

NEW QUESTION 50
Marsalis Products Inc. manufactures and sells batteries and cables for computers. The latest information on the products and their costs is shown in the following table.
CMA-Financial-Planning-Performance-and-Analytics-2a86e1ca6ad71186117512ef6a419e7b.jpg
Note: 1 Fixed manufacturing cost of S1.500,000 per year is allocated to products based on the number of machine hours required to produce the product at a rate of S3 per machine hour.
Based on the information above, what is the annual amount of earnings before interest and taxes (EBIT)?

  • A. $4,420,000.
  • B. $1,460,000.
  • C. $2,960.000.
  • D. $2,920,000.

Answer: B

 

NEW QUESTION 51
A fitness company produces workout video content and snares it online. The company has subscribers all over the world and its subscriber base has shown steady growth Management has approached a popular workout apparel company to discuss potential sponsorship opportunities. The goal is to impress the potential sponsor by showing the growth in total subscribers over the last 12 months. All of the following would be appropriate options for visualizing this data except a

  • A. bar graph
  • B. pie chart
  • C. table
  • D. line graph

Answer: B

 

NEW QUESTION 52
Which of the following represents a significant deficiency m the design of controls?

  • A. Inadequate controls over access to computer systems, data and files
  • B. Management overrides of the accounting for transactions
  • C. Evidence of misrepresentation by accounting personnel
  • D. Failure to follow up and correct previously identified internal control deficiencies

Answer: A

 

NEW QUESTION 53
A company s accounting department is run by only one accountant. Which one of the following can be implemented as a detective control?

  • A. Train another employee to record journal entries.
  • B. Train another employee to perform bank reconciliations
  • C. Require the accountant to double-check his work
  • D. Require the accountant to update cash balance regularly

Answer: B

 

NEW QUESTION 54
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