PTA2 Flashcards
In COBIT, the process of developing tactics to realize the strategic vision for IT falls within the \_\_\_\_\_\_\_\_\_ control process domain. Acquire and implement. Deliver and support. Monitor and evaluate. Plan and organize.
Plan and organize.
This Answer is Correct
The process of developing tactics to realize the strategic vision for an information technology unit falls within the plan and organize control process domain in COBIT.
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? Control baseline. Change identification. Change management. Control revalidation/update.
This Answer is Correct
Change Identification is the monitoring for change process that would include ongoing and separate evaluations intended to identify and address changes in internal control effectiveness.
Based on the following data, what is the gross profit for the company?
Sales $1,000,000 Net purchases of raw materials 600,000 Cost of goods manufactured 800,000 Marketing and administrative expenses 250,000 Indirect manufacturing costs 500,000 Beginning inventory Ending inventory Work in process $500,000 $400,000 Finished goods 100,000 500,000 $200,000 $400,000 $600,000 $900,000
600,000 This Answer is Correct
This calculation uses the Cost of Goods Manufactured and the Cost of Goods Sold (CGS) statement format to produce CGS of $400,000. Then, subtracting CGS from Sales of $1,000,000 provides Gross Profit of $600,000.
500 - 100 = 400 finished goods
800 cogm - 400 finished goods =400
1mil - 400 = 600,000
Which of the following statements is correct regarding the difference between the absorption costing and variable costing methods?
When production equals sales, absorption costing income is greater than variable costing income.
When production equals sales, absorption costing income is LESS than variable costing income.
When production is greater than sales, absorption costing income is greater than variable costing income.
When production is LESS than sales, absorption costing income is greater than variable costing income.
This Answer is Correct
When production is greater than sales, absorption costing income is greater than variable costing income. This is why managers are often tempted to overproduce.
o evaluate its performance, the Blankie Co. is comparing its costs of quality from one year to the next. The relevant costs are as follows:
First Year Second Year Prevention $45,000 $60,000 Appraisal 25,000 35,000 Internal failure 80,000 50,000 External failure 75,000 65,000 Which of the following conclusions can Blankie draw about its quality program?
It has been a failure, because conformance costs decreased by $40,000 while nonconformance costs increased by $25,000.
It has been a success, because conformance costs decreased by $40,000 and nonconformance costs increased by $25,000.
It has been a failure, because conformance costs increased by $25,000 while nonconformance costs decreased by $40,000.
It has been a success, because conformance costs increased by $25,000 while nonconformance costs decreased by $40,000.
It has been a success, because conformance costs increased by $25,000 while nonconformance costs decreased by $40,000.
This Answer is Correct
This answer is based on two parts: (1) the determination of success or failure, and (2) the amount of conformance costs v. non-conformance costs. Success is defined by minimizing total costs (costs decreased by $15,000). Conformance costs are prevention and appraisal, and non-conformance costs are internal and external failure.
According to the 17 COSO control principles, addressing control deficiencies primarily relates to which fundamental component of internal control: Control activities. Control environment. Information and communication. Monitoring.
Monitoring.
This Answer is Correct
According to the COSO principles, monitoring primarily relates to establishing ongoing and periodic evaluations, and addressing control deficiencies.
Question 14
AICPA.130709BEC
The following information is available for economic activity for year 1:
In billions Financial transactions $60 Second-hand sales 50 Consumption by households 40 Investment by businesses 30 Government purchases of goods and services 20 Net exports 10 What amount is the gross domestic product for year 1?
$210 billion.
$160 billion.
$100 billion.
$90 billion.
100B
You Answered Correctly!
Gross domestic product (GDP) is the total output of final goods and services produced during a period. It can be measured using either the expenditures approach or the income approach. The information provided permits GDP to be measured using the expenditures approach, which is the sum of:
Consumption by individuals/households $40B
Investment by businesses 30
Government purchases 20
Net exports (net purchases by foreign buyers) 10
Total Expenditures (GDP) $100B
Indirect labor is a Prime cost. Conversion cost. Period cost. Nonmanufacturing cost.
This Answer is Correct
Conversion cost is the sum of direct labor and overhead. It is so named because this is the cost of the efforts that convert raw material into finished goods. Indirect labor is included in overhead and, thus, is part of conversion cost.
Question 17
AICPA.930544BEC-TH-AR
The benefits of a just-in-time system for raw materials usually include
Elimination of nonvalue-adding operations.
Increase in the number of suppliers, thereby ensuring competitive bidding.
Maximization of the standard delivery quantity, thereby lessening the paperwork for each delivery.
Decrease in the number of deliveries required to maintain production.
Elimination of Non Value Adding operations This Answer is Correct
A JIT system seeks to reduce those activities that do not increase the value of the product to the customer. For example, the time required to move materials between departments is reduced and paperwork is minimized. Operations are streamlined and simplified. JIT is much more than the minimization of inventories.
Based on the information below, the marginal cost of producing the ninth unit is
Total units of product Average fixed cost Average variable cost Average total cost 6 $15.00 $25.00 $40.00 7 12.86 24.00 36.86 8 11.25 23.50 34.75 9 10.00 23.75 33.75 (This question is CMA adapted)
$23.50
$23.75
$25.75
$33.75
25.75 This Answer is Correct
Marginal cost is the additional cost of producing one additional item. To calculate the marginal cost of producing the ninth unit we take the total cost of producing nine units and deduct the total cost of producing eight units. Thus, the correct answer is (9 × $33.75) − (8 × $34.75) = $25.75.
According to the 17 COSO control principles, addressing control deficiencies primarily relates to which fundamental component of internal control: Control activities. Control environment. Information and communication. Monitoring.
This Answer is Correct
According to the COSO principles, monitoring primarily relates to establishing ongoing and periodic evaluations, and addressing control deficiencie
