Part 1 – Financial Reporting, Planning, Performance and Control Examination Practice Questions
1. An advantage of an enterprise resource planning system is that a. b. c. d.
it can usually be installed by organizations of all sizes. the system can be easily customized to suit the unique needs of the organization. the comprehensiveness of the system reduces resistance to change. its implementation improves business processes.
2. Hayden Ross has four booth rental options at the county fair where he plans to sell his new product for $37.50 per unit with a cost of $12.50. The booth rental options are shown below. Option 1: $1,000 fixed fee Option 2: $750 fixed fee + 5% of all revenues generated at the fair Option 3: $20% of all revenues generated at the fair Option 4: $200 fixed fee + 16% of all revenues generated at the fair Assuming there is a 40% probability that 70 units will be sold and a 60% probability that 40 units will be sold, which option maximizes income? a. b. c. d.
Option 1. Option 2. Option 3. Option 4.
3. A company produces two products that incur $50,000 of joint costs. At the split-off point, 5,000 units of Product 1 and 15,000 units of Product 2 can be sold for $5 and $3 per unit, respectively. These products are processed further. Product 1 incurs $25,000 of separable costs and is then sold for $12 per unit, and Product 2’s separable costs total $30,000 with a final selling price of $6 per unit. If the company uses the constant gross profit method to allocate joint costs, the dollar amount of joint costs allocated to Product 1 would be a. b. c. d.
$17,000. $17,857. $18,421. $20,000.
4. A publicly-traded company has 100,000 outstanding shares of common stock, with a par value of $5. The company uses U.S. GAAP to prepare its financial statements. The company recently 431
