Question

22. Life cycle cost management take se management takes into consideration the fact that costs and revenues A. are higher in the early stages of the product life cycle than in Ses of the product life cycle than in later stages. C. Slow down in the maturity stage of the product life cycle. herent stages of the product's life cycle. D. are higher when products use more activities. 23. An equivalent unit is calculated by A. dividing the number of physical units by their percentage of completion B. multiplying the number of physical units by their percentage of completion. c. dividing the number of physical units into direct materials and conversion costs. D. subtracting the number of physical units in ending Work in Process Inventory from the total number of physical units. 24. Which of the following is a requirement under the Sarbanes-Oxley Act? A. Financial statements must be audited by a Big Four accounting firm. B. Management must issue a report that indicates whether the financial statements are free of error. C. Management must conduct a review of the company's internal control system. D. Background checks must be performed on all employees. 25. What determines the difference between a variable and a fixed cost? A. Whether it changes when activity levels change. B. Whether it is relevant to a particular decision. C. Whether it can be traced to a specific cost object. D. Whether it is related to manufacturing or nonmanufacturing activities. 26. A cost is $50,000 when 25,000 units are produced, and $100,000 when 50,000 units are produced. This is an example of a(n) A. fixed cost. B. direct cost. C. variable cost. D. indirect cost.

Answer 1

Question No.	Correct Option	Reason
22	B	Life cycle cost management of product refers to managing is its cost and pricing at different stages of the life cycle of a product. Generally cost of a product is not constant throughout its life cycle. Cost of a product depends on various situations and reason evolved during period of time. Thus to manage the cost and pricing life cycle cost management system is applied.
23	B	Equivalent unit is calculated to determine actual cost of production where cost is incurred during a period and some WIP remained at the end of period. To calculate cost of transferred product and WIP inventory, equivalent units is calculated by multiplying no. of physical units by their percentage of completion.
24	C	Sarben Oxley Act was first enacted in USA after management fraud of few big business enterprises such as banks. Their internal control system were found deficient to prevent and detect fraud thereby a law has been enacted which ensure efficient internal control system of a business organization.
25	A	Variable cost is a cost which changes with change in level of activity but remain constant per unit. However Fixed cost is remain constant in at the change in level of activity and changes per unit.
26	C	Variable cost is a cost which changes with change in level of activity but remain constant per unit. However Fixed cost is remain constant in at the change in level of activity and changes per unit.