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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Controls and Regulations | 10–15% | - Internal control systems and principles
|
| Topic 2: Budgeting and Decision Making | 10–15% | - Master budget and components
|
| Topic 3: Cost Systems | 20–25% | - Costing methods
|
| Topic 4: Profit Planning | 10–15% | - Cost-volume-profit (CVP) analysis
|
| Topic 5: Financial Analysis | 45–50% | - Financial statement analysis techniques
|
1. What is a cost incurred as part of the production process?
A) Sunk cost
B) Raw materials cost
C) Period cost
D) Opportunity cost
2. Where should a company report cash payments to acquire or construct long-term fixed assets on a statement of cash flows?
A) Cash flows from investing activities
B) Cash flows from business activities
C) Cash flows from financing activities
D) Cash flows from operating activities
3. A company manufactures and sells widgets. The following information is available:
* Total fixed costs per month are $300,000
* The variable cost per widget is $50
* Each widget sells for $100
How many widgets does the company need to sell each month to break even?
A) 3,000
B) 4,500
C) 2,000
D) 6,000
4. Which act was implemented as a result of the corporate scandals at companies such as Enron and WorldCom?
A) Securities Exchange Act
B) Corporate Accountability Act
C) Sarbanes-Oxley Act
D) Auditing Accountability Act
5. A company presently uses traditional volume-based costing to allocate overhead to its products.
The following table provides information on two of the company's products:
Product A
Product B
Selling price
$8
$12
Direct material
$2
$3
Direct labor
$1
$2
Applied overhead
$3
$4
Gross margin
$2
$3
Overhead that would be applied to Product A would increase to $8 per unit after identifying cost pools and cost drivers, and the overhead applied to Product B would drop to $2 per unit .
How would this change in the way overhead is allocated affect the selling price of both products?
A) The price of Product A would decrease, and the price of Product B would increase
B) The price of neither product would change
C) The price of Product A would increase, and the price of Product B would decrease
D) The price of Product A would increase, and the price of Product B would increase
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: A | Question # 3 Answer: D | Question # 4 Answer: C | Question # 5 Answer: C |
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