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Unit 1 : Business 1 - Quiz

Time Remaining:


Question 1.1. (TCO A) (CPA-05783) Which of the following costs would decrease if production levels
were increased within the relevant range? (Points : 10)
Total fixed costs.
Variable costs per unit.
Total variable costs.
Fixed costs per unit.


Question 2.2. (TCO A) (CPA-06992) Each of the following is a limitation of enterprise risk management
(ERM), except: (Points : 10)
ERM deals with risk, which relates to the future and is inherently uncertain.
ERM operates at different levels with respect to different objectives.
ERM can provide absolute assurance with respect to objective categories.
ERM is as effective as the people responsible for its functioning.


Question 3.3. (TCO A) (CPA-03642) Kimbeth Manufacturing uses a process cost system to manufacture
Dust Density Sensors for the mining industry. The following information pertains to operations for the
month of May:

Units
Beginning work-in-process inventory, May 1 16,000
Started in production during May 100,000
Completed production during May 92,000
Ending work-in-process inventory, May 31 24,000

The beginning inventory was 60 percent complete for materials and 20 percent complete for conversion
costs. The ending inventory was 90 percent complete for materials and 40 percent complete for
conversion costs.

Costs pertaining to the month of May are as follows:
Beginning inventory costs are: materials, $54,560; direct labor $20,320; and factory overhead,
$15,240.
Costs incurred during May are: materials used, $468,000; direct labor, $182,880; and factory
overhead, $391,160.

Using the FIFO method, the total cost of units in the ending work-in-process inventory at May 31
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is: (Points : 10)
$153,168
$154,800
$155,328
$156,960


Question 4.4. (TCO A) (CPA-03616) Madtack Company's beginning and ending inventories for the month
of November Year 1 are:

November 1 November 30
Direct materials $ 67,000 $ 62,000
Work-in-process 145,000 171,000
Finished goods 85,000 78,000

Production data for the month of November follows.
Direct labor $200,000
Actual factory overhead 132,000
Direct materials purchased 163,000
Transportation in 4,000
Purchase returns and allowances 2,000

Madtack uses one factory overhead control account and charges factory overhead to production at 70
percent of direct labor cost. The company does not formally recognize over/underapplied overhead until
year-end.

Madtack Company's total manufacturing cost for November is: (Points : 10)
$502,000
$503,000
$495,000
$510,000


Question 5.5. (TCO A) (CPA-06661) Boyle, Inc. makes two products, X and Y that require allocation of
indirect manufacturing costs. The following data was compiled by the accountant before making any
allocations:

Product X Product Y
Quantity produced 10,000 20,000
Direct manufacturing labor hours 15,000 5,000
Setup hours 500 1,500

The total cost of setting up manufacturing processes and equipment is $400,000. The company uses a
job-costing system with a single indirect cost rate. Under this system, allocated costs were $300,000
and $100,000 for X and Y, respectively. If an activity-based system is used, what would be the
allocated costs for each product?

Product X Product Y (Points : 10)
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$100,000 $300,000
$150,000 $250,000
$200,000 $200,000
$250,000 $150,000


Question 6.6. (TCO A) (CPA-07013) According to COSO, the use of ongoing and separate evaluations to
identify and address changes in internal control effectiveness can best be accomplished in which of the
following stages of the monitoring-for-change continuum? (Points : 10)
Control baseline.
Change identification.
Change management.
Control revalidation/update.


Question 7.7. (TCO A) (CPA-0664) According to COSO, which of the following components of enterprise
risk management addresses an entitiy's iintegrity and ethical values? (Points : 10)
Information and communication.
Internal environment.
Risk assessment.
Control activities.


Question 8.8. (TCO A) (CPA-03972) The use of activity-based costing normally results in: (Points : 10)
Substantially greater unit costs for low-volume products than is reported by traditional product
costing.
Substantially lower unit costs for low-volume products than is reported by traditional product
costing.
Decreased set-up costs being charged to low-volume products.
Equalizing set-up costs for all product lines.


Question 9.9. (TCO A) (CPS-05574) What is the cost of ending inventory given the following factors?

Beginning inventory $5,000
Total production costs 60,000
Cost of goods sold 55,000
Direct labor 40,000 (Points : 10)
$5,000
$10,000
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$45.000
$50,000


Question 10.10. (TCO A) (CPA-03940) The distribution of overhead costs is known as: (Points : 10)
Cost allocation.
Cost management.
Burden distribution.
Uncontrollable cost allocation.