Question 1

A specialty instrument manufacturer is in the process of establishing a cost system. The company produces machines that are unique and distinctive. These machines are produced when purchase requests are received from customers. Although some common parts and sub-assemblies are to be held in inventory, no finished goods inventory is maintained since each purchase request is for a customized specialty instrument. The type of cost accumulation system that would be best suited for this type of environment would be

Options :

A : Batch-level costing.

B : Process costing.

C : Job-order costing.

D : Backflush costing.

Answer: C

Question 2

Which one of the following is the best reason for using variable costing?

Options :

A : Variable costing is acceptable for income tax reporting purposes.

B : All costs are variable in the long term.

C : Fixed factory overhead is more closely related to the capacity to produce than to the production of specific units.

D : Variable costing usually results in higher operating income than if a company uses absorption costing.

Answer: C

Question 3

A budget developed by using budgeted prices and budgeted costs based on the actual output in the budget period is a(n)

Options :

A : continuous budget.

B : flexible budget.

C : life-cycle budget.

D : operating budget.

Answer: B

Question 4

Which of the following statements is a responsibility for an IMA member regarding the "Integrity" standard of ethical conduct?

Options :

A : To refrain from using confidential information for unethical or illegal advantage.

B : Perform professional duties in accordance with relevant laws, regulations, and technical standards.

C : Provide all relevant information that could reasonably be expected to influence an intended user-s understanding of the reports,analyses, or recommendations.

D : Refrain from engaging in any conduct that would prejudice carrying out duties ethically.

Answer: D

Question 5

A company had sales in its first year of operation of $3,450,800 and $4,576,000 in the second year. Salary expense for the business was $568,920 in year one and $622,310 in year two.What is the annual growth rate in salaries?

Options :

A : 9.38%.

B : 18.03%.

C : 8.58%.

D : 13.60%.

Answer: A

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