IIA-CIA-PART3 practice questions 61–70

1. Question 61 · 336 in bank

   Which of the following is classified as a product cost using the variable costing method? 1. Direct labor costs. 2. Insurance on a factory. 3. Manufacturing supplies. 4. Packaging and shipping costs.

   • A1 and 2.
   • B1 and 3.
   • C2 and 4.
   • D3 and 4.

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   Answer: D

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2. Question 62 · 336 in bank

   During the last year, an organization had an opening inventory of $300,000, purchases of $980,000, sales of $1,850,000, and a gross margin of 40 percent. What is the closing inventory if the periodic inventory system is used?

   • A$170,000
   • B$280,000
   • C$300,000
   • D$540,000

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   Answer: A

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3. Question 63 · 336 in bank

   An organization has 1,000 units of a defect item in stock. Per unit, market price is $10; production cost is $4; and the defect selling price is $5. What is the carrying amount (inventory value) of defects at year end?

   • A$0
   • B$4,000
   • C$5,000
   • D$10,000

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   Answer: B

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4. Question 64 · 336 in bank

   Which of the following describes the free trade zone in an e-commerce environment?

   • AZone that separates an organization's servers from outside forces.
   • BArea in which messages are scrutinized to determine if they are authorized.
   • CArea where communication and transactions occur between trusted parties.
   • DZone where data is encrypted, users are authenticated, and user traffic is filtered.

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   Answer: C

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5. Question 65 · 336 in bank

   An organization produces two products, X and Y. The materials used for the production of both products are limited to 500 kilograms (kg) per month. All other resources are unlimited and their costs are fixed. Individual product details are as follows: Product X - Product Y - Selling price per unit - $10 $13 Materials per unit (at $1/kg) 2 kg 6 kg Monthly demand - 100 units 120 units In order to maximize profit, how much of product Y should the organization produce each month?

   • A50 units.
   • B60 units.
   • C100 units.
   • D120 units.

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   Answer: A

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6. Question 66 · 336 in bank

   Which of the following situations best applies to an organization that uses a project, rather than a process, to accomplish its business activities?

   • AA clothing company designs, makes, and sells a new item.
   • BA commercial construction company is hired to build a warehouse.
   • CA city department sets up a new firefighter training program.
   • DA manufacturing organization acquires component parts from a contracted vendor.

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   Answer: B

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7. Question 67 · 336 in bank

   At an organization that uses a periodic inventory system, the accountant accidentally understated the organization's beginning inventory. How would the accountant's accident impact the income statement?

   • ACost of goods sold will be understated and net income will be overstated.
   • BCost of goods sold will be overstated and net income will be understated.
   • CCost of goods sold will be understated and there will be no impact on net income.
   • DThere will be no impact on cost of goods sold and net income will be overstated.

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   Answer: A

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8. Question 68 · 336 in bank

   Which of the following standards would be most useful in evaluating the performance of a customer-service group?

   • AThe average time per customer inquiry should be kept to a minimum.
   • BCustomer complaints should be processed promptly.
   • CEmployees should maintain a positive attitude when dealing with customers.
   • DAll customer inquiries should be answered within seven days of receipt.

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   Answer: D

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9. Question 69 · 336 in bank

   Which of the following application controls is the most dependent on the password owner?

   • APassword selection.
   • BPassword aging.
   • CPassword lockout.
   • DPassword rotation.

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   Answer: A

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10. Question 70 · 336 in bank

    According to Herzberg's Two-Factor Theory of Motivation, which of the following factors are mentioned most often by satisfied employees?

    • ASalary and status.
    • BResponsibility and advancement.
    • CWork conditions and security.
    • DPeer relationships and personal life.

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    Answer: B

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IIA-CIA-PART3 practice, question 61. 336 questions available.