kamal akht.

1C2
INTERNATIONAL PROFESSIONAL FINANCIAL CAREERS ACADEMY PVT LTD

MOCK TEST RESULT ANALYSYS

PART 1 CMA: COST MANAGEMENT - Test Series II
----------------------------

Student name: kamal akht

Level A : Easy
LEvel B : Moderate
LEvel C : Tough
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Questions # 1
Costs that arise from periodic budgeting decisions that have no strong
input-output relationship are commonly called:
A. Committed costs.
B. Discretionary costs.
C. Opportunity costs.
D. Differential costs.

You have answered : D

This is a Level A question

CORRECT Discretionary costs are characterized by uncertainity about the

relationship between input (the costs) and the value of the related
output. Advertising and reseach are examples. They should be
contrasted with engineered costs, that is, costs having a clear
input-output relationship (e.g. the cost of direct materials).

No of correct respondees to this question : 7 out of 65

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Questions # 2
Departmental overhead rates are usually preferred to plant-wide
overhead rates when
A. The activities of each of the various departments in the plant are
not homogeneous.
B. The costs of many service departments are being allocated to each
of the various departments.
C. All products passing through the various departments require the
same manufacturing effort in each department.
D. Most of the overhead costs are fixed.
You have answered : B
This is a Level B question
WRONG The activity for overhead allocation should have a high corelation
with the incurrence of overhead. Thus, the activities of various
departments are usually more appropriate as activity bases than
plant-wide activities, particularly when products and production
activities are not homogeneous.

No of correct respondees to this question : 35 out of 65

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Questions # 3
The cost of statistical quality control in a product quality cost
system is categorized as a(n)
A. External failure cost.
B. Internal failure cost.
C. Prevention cost.
D. Appraisal cost.

You have answered : C

This is a Level A question
WRONG Statistical quality control methods attempt to identify nonrandom
variations in operating activities. The costs of maintaining a
statistical quality control system are appraisal costs because they
are incurred to detect products not meeting specifications.
No of correct respondees to this question : 28 out of 65
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Questions # 4
A new advertising agency serves a wide range of of clients including
manufacturers, restaurants, service businesses, department stores, and
other retail establishments. The accounting system the advertising
agency has most likely adopted for its record keeping in accumulating
costs is

A. Job-order costing.
B. Operation costing.
C. Relevant costing.
D. Process costing.

You have answered : A

This is a Level B question

CORRECT Job-order costing is used by organizations whose products or services

are readily identified by individual units or batches. The
advertising agency accumulates its costs by client. Job-order costing
is the most appropriate system for this type of nonmanufacturing firm.
No of correct respondees to this question : 51 out of 65
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Questions # 5
Which of the following statements about activity-based costing is not
true?
A. Activity-based costing is useful for allocating marketing and
distribution costs.
B. Activity-based costing is more likely to- result in major
differences from traditional costing systems if the firm manufactures
only one product rather than multiple products.
C. In activity-based costing, cost drivers are what causes costs to be
incurred.
D. Activity-based costing differs from traditional costing systems in
that products are not cross-subsidized.
You have answered : D
This is a Level B question
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WRONG ABC determines the activities that will serve as cost objects and then
accumulates a cost pool for each activity using the appropriate
activity base (cost driver). It is a system that may be employed with
job order or process costing methods. Thus, when there is only one
product, the allocation of costs to the product is trivial. All of
the cost is assigned to the one product; the particular method used to
allocate the costs does not matter.

No of correct respondees to this question : 28 out of 65

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Questions # 6
A corporation provides management consulting services to hospitals.
Consulting engagements vary widely from hospital to hospital, both in
terms of the nature of the consulting services provided and the scope
of the consulting engagements. The most appropriate product costing
system for the corporation is a
A. Process costing sytem
B. Job-order costing system.
C. Operations costing system.
D. Just-in-time costing system.
You have answered : B

This is a Level A question

CORRECT The job-order cost system of accounting is appropriate when producing

products with individual characteristics and/or when identifiable
groupings are possible, e.g., batches of certain styles of types of
furniture. The unique aspect of job-order costing is appropriate in
consulting because of the substantial variation between engagements.

No of correct respondees to this question : 33 out of 65

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Questions # 7
Abnormal spoilage is
A. Not expected to occur when perfection standards are used.
B. Not usually controllable by the production supervisor.
C. The result of unrealistic production standards.
D. Not expected to occur under efficient operating conditions.
You have answered : D

This is a Level A question

CORRECT Abnormal spoilage is spoilage that is not expected to occur under

normal, efficient operating conditions. The cost of abnormal spoiage
should be separately identified and reported to management. Abnormal
spoilage is typically treated as period cost (a loss) because of its
unusual nature.
No of correct respondees to this question : 36 out of 65

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Questions # 8
Joint costs are useful for

A. Setting the selling price of a product.

B. Determining whether to continue producing an item.
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C. Evaluating management by means of a responsibility reporting
system.
D. Determining inventory cost for accounting purposes.
You have answered : A

This is a Level A question

WRONG Joint costs are useful for inventory costing when two or more
identifiable products emerge from a common production process. The
joint costs of production must to allocated on some basis, such as
relative sales value.
No of correct respondees to this question : 35 out of 65

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Questions # 9
Because this allocation method recognizes that service departments
often provide each other with interdepartmental service, it is
theoritically considered to be the most accurate method of allocating
service department costs to production departments. This method is
the

A. Direct method.
B. Variable method.
C. Reciprocal method.
D. Linear method.

You have answered : D

This is a Level A question

WRONG The three most common methods of allocating service department costs
are the direct method, the step method, and the reciprocal method
(also called the simultaneous equations method). The reciprocal
method is theoritically the preferred method because it recognizes
reciprocal services among service departments.

No of correct respondees to this question : 46 out of 65

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Questions # 10
Life-cycle costing

A. Is sometimes used as a basis for cost planning and product pricing.

B. Includes only manufacturing costs incurred over the life of the
product.
C. Includes only manufacturing cost, selling expense, and distribution
expense.
D. Emphasizes cost savings opportunities during the manufacturing
cycle.
You have answered : B

This is a Level A question

WRONG Life-cycle costing estimates a product's revenues and expenses over
its expected life cycle. This approach is especially useful when
revenues and related costs do not occur in the same periods. It
emphasizes the need to price products to cover all costs, not just
those for production. Hence, costs are determined for all value-chain
categories: upstream (R&D, design), manufacturing, and downstream
(marketing, distribution and customer service). The result is to
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highlight upstream and downstream costs in the cost planning process
that often receive insufficient attention.

No of correct respondees to this question : 32 out of 65

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Questions # 11
The costing system appropriate to use with a JIT inventory system
whose costs flow directly to cost of goods sold is

A. Activity-based costing.
B. Variable costing.
C. Backflush costing.
D. Absorption costing.

You have answered : A

This is a Level A question

WRONG Backflush costing is often used with JIT inventory system. It delays
costing until goods are finished. Standard costs are then flushed
backward through the system to assign costs to the products. The
result is that detailed tracking of costs is eliminated. The system
is best suited to companies that maintain low inventories because
costs then flow directly to cost of goods sold.

No of correct respondees to this question : 32 out of 65

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Questions # 12
Sonimad Sawmill manufactures two lumber products from a joint milling
process. The two products developed are mine support braces (MSB)
and unseasoned commercial lumber (CBL). A standard production run
incurs joint costs of $300,000 and results in 60,000 units of MSB and
90,000 units of CBL. Each MSB seels for $2 per unit, and each CBL
sells for $4 per unit.
Assuming no further processing work is done after the split-off
point, the amount of joint cost allocated to commerical building
lumber (CBL) on a physical quantity allocation basis would be

A. $75,000
B. $180,000
C. $225,000
D. $120,000
You have answered : C

This is a Level B question

WRONG Given 60,000 units of MSB and 90,000 units of CBL (a total of 150,000
units), CBL makes up 60% of the total quantity (90,000/150,000*100).
Hence, CBL should be charged with 60% of the joint costs (60% of
$300,000=$180,000)
No of correct respondees to this question : 49 out of 65

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Questions # 13
Sonimad Sawmill manufactures two lumber products from a joint milling
process. The two products developed are mine support braces (MSB)
and unseasoned commercial lumber (CBL). A standard production run
incurs joint costs of $300,000 and results in 60,000 units of MSB and
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90,000 units of CBL. Each MSB seels for $2 per unit, and each CBL
sells for $4 per unit.

If there are no further processing costs incurred after the split-off

point, the amount the joint costs allocated to the mine support braces
(MSB) on a relative sales value basis would be
A. $75,000
B. $180,000
C. $225,000
D. $120,000
You have answered : B
This is a Level B question

WRONG At $2 each, teh 60,000 units of MSL sell for $120,000. At $4 each,
the 90,000 units of CBL sell for $360,000. Because 25%
[$120,000/($120,000+$360,000)] of the total sales are produced by
MSB, it should absorb 25% of the joint cost. Thus, $75,000 (25% of
$300,000 joint cost) is allocated to MSB.

No of correct respondees to this question : 42 out of 65

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Questions # 14
Sonimad Sawmill manufactures two lumber products from a joint milling
process. The two products developed are mine support braces (MSB)
and unseasoned commercial lumber (CBL). A standard production run
incurs joint costs of $300,000 and results in 60,000 units of MSB and
90,000 units of CBL. Each MSB seels for $2 per unit, and each CBL
sells for $4 per unit.

Assume the commercial building lumber is not marketable at split-off

but must be further planed and sized at a cost of $200,000 per
production run. During this process, 10,000 units are unavoidably
lost; these spoiled units have no discernible value. The remaining
units of commercial building lumber are salable at $10.00 per unit.
The mine support braces, although salable immediately at the split-off
point, are coated with a tar-like preservative that costs $100,000 per
production run. The braces are then sold for $5 each.

Using net realizable value (NRV) basis, the completed cost assigned to
each unit of commercial building lumber would be
A. $2.92
B. $5.625
C. $2.50
D. $5.3125
You have answered : B
This is a Level C question

WRONG The first step is to compute the sales for each product. The 60,000
units of MSB sell for $5 each after $100,000 of additional costs are
incurred. The NRV is therefore $200,000 [($5 x 60,000
units)-$100,000]. The 80,000 units of CBL sell for $10 each, or
$800,000, after further processing. But to determiine the NRV for
CBL, the costs of this processing must be deducted from sales.
Consequently, the NRV for CBL is $600,000 ($800,000-$200,000). CBL
contributes 75% [$600,000/($200,000+$600,000)] of the realizable value
and should bear an equal proportion of the $300,000 of joint costs, or
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$225,000. The total cost of CBL is $425,000($225,000+$200,000) and
the unit cost is $5.3125 ($425,000/80,000)

No of correct respondees to this question : 37 out of 65

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Questions # 15
Sonimad Sawmill manufactures two lumber products from a joint milling
process. The two products developed are mine support braces (MSB)
and unseasoned commercial lumber (CBL). A standard production run
incurs joint costs of $300,000 and results in 60,000 units of MSB and
90,000 units of CBL. Each MSB seels for $2 per unit, and each CBL
sells for $4 per unit.
If Sonimad Sawmill chose not to process the mine support braces
beyond the split-off point, the contribution from the joint milling
process would be
A. $50,000 higher
B. $100,000 higher
C. $150,000 higher
D. $80,000 lower

You have answered : D

This is a Level B question

CORRECT MSB sells for $120,000 ($2x60,000 units) at the split-off point. By
processing further, the company earns $200,000 ($300,000 in
sales-$100,000 in preservative costs). Thus, the contribution from
the joint milling process would be $80,000 lower ($200,000-$120,000)
if MSB is sold at the split-off point.

No of correct respondees to this question : 42 out of 65

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Questions # 16
Killian Company manufactures two skin care lotions. Liquid Skin and
Silken Skin, out of a joint process. The joint (common) costs
incurred are $420,000 for a standard production run that generates
180,000 gallons of Liquid Skin and 120,000 gallons of Silken Skin.
Liquid Skin sells for $2.40 per gallon, and Silken Skin sells for
$3.90 per gallon.

Assuming both products are sold at the split-off point, the amout of
joint cost of each production run allocated to Liquid Skin on a net
realizable value (NRV) basis is

A. $168,000
B. $201,600
C. $218,400
D. $252,000
You have answered : D
This is a Level B question

WRONG Under NRV method, additional separable costs are deducted from sales
revenue to determine the NRV. In this problem, no additional costs
are incurred, so the NRV equals the total sales revenue for the joint
products.
Liquid Skin 180,000 x 2.40 = $432,000
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Silken Skin 120,000 x $3.90 = $468,000
Total Sales -----------
$900,000
============
Because sales of Liquid Skin make up 48% of total sales
($432,000/$900,000), it should be allocated 48% of the joint cost.
Thus Liquid Skin's share is $201,600 (48% of $420,000)

No of correct respondees to this question : 38 out of 65

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Questions # 17
Killian Company manufactures two skin care lotions. Liquid Skin and
Silken Skin, out of a joint process. The joint (common) costs
incurred are $420,000 for a standard production run that generates
180,000 gallons of Liquid Skin and 120,000 gallons of Silken Skin.
Liquid Skin sells for $2.40 per gallon, and Silken Skin sells for
$3.90 per gallon.

If additional processing costs beyond split-off point are $1.40 per

gallon for Liquid Skin and $0.90 per gallon for Silken Skin, the
amount of joint cost of each production run allocated to Silken Skin
on a net realizable value basis is
A. $140,000
B. $168,000
C. $252,000
D. $280,000
You have answered : C

This is a Level C question

WRONG If the products cannot be sold at split-off, additional processing

cost must be incurred. Under the NRV method, these additional costs
are deducted from sales to determine NRV. Total sales of the joint
products are $432,000 for Liquid Skin and $468,000 for Silken Skin.
The costs incurred beyond the split-off point are

Liquid Skin 180,000 gals. x $1.40=$252,000

Silken Skin 120,000 gals. x $0.90=$108,000
The NRVs are $180,000 ($432,000-$252,000) for Liquid Skin and
$360,000 ($468,000-$108,000) for Silken Skin, a total of $540,000.
Consequently, Silken Skin shoud be allocated $280,000 of the joint
cost [$420,000 x (360,000/$540,000)]
No of correct respondees to this question : 31 out of 65
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Questions # 18
A company has two service departments, Power and Maintenance, and
two production departments, Machining and Assembly. All costs are
regarded as strictly variable.

For September, the following information is available:

Service Dept. Prod. Dept.
------------- --------------
Power Maint. Machin. Assembly
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Direct costs $62,500 $40,000 $25,000 $15,000
Actual Activity:
Kilowatt Hrs. 50,000 150,000 50,000
Maintenance Hrs. 250 1,125 1,125
If the company uses the direct method of allocating service
departments costs to production departments, what dollar amount of
Power Department cost will be allocated to the Machining Department
for September?

A. $37,500
B. $15,625
C. $39,062.50
D. $46,875

You have answered : B

This is a Level C question

WRONG Under the direct method, service deparment costs are allocated
directly to the producing departments without recognition of services
provided to other service departments. Allocation of service
deparment costs are made only to productionj departments based on
their relative use of services, in this case kilowatt hours. Thus,
the cost allocated to the Machining Department is $46,875 [$62,500 x
(150,000/200,000)]
No of correct respondees to this question : 29 out of 65

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Questions # 19
A company has two service departments, Power and Maintenance, and
two production departments, Machining and Assembly. All costs are
regarded as strictly variable.

For September, the following information is available:

Service Dept. Prod. Dept.
------------- --------------
Power Maint. Machin. Assembly
Direct costs $62,500 $40,000 $25,000 $15,000
Actual Activity:
Kilowatt Hrs. 50,000 150,000 50,000
Maintenance Hrs. 250 1,125 1,125
If the company uses the direct method for allocating service
deparments costs to production departments, what dollar amount of
Power Department cost will be allocated to Maintenance Department for
September?
A. $17,544
B. $12,500
C. $15,625
D. $0
You have answered : C

This is a Level B question

WRONG Under the direct method, service department costs are allocated
directly to the producing departments without recognitiono of services
provided to other service departments. Allocation of service
department costs are made only to production departments based on
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their relative use of services. Thus, none of the cost will be
allocated to the maintenance department.

No of correct respondees to this question : 36 out of 65

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Questions # 20
A company has two service departments, Power and Maintenance, and
two production departments, Machining and Assembly. All costs are
regarded as strictly variable.
For September, the following information is available:
Service Dept. Prod. Dept.
------------- --------------
Power Maint. Machin. Assembly
Direct costs $62,500 $40,000 $25,000 $15,000
Actual Activity:
Kilowatt Hrs. 50,000 150,000 50,000
Maintenance Hrs. 250 1,125 1,125
Assume the company uses the sequential or step method for allocating
service department costs to production departments. The company
begins with the service department, which receives the least service
from other service departments. What dollar amount of Power
Department costs will be allocated to the Maintenance Department for
September?

A. $0
B. $12,500
C. $6,250
D. $8,000

You have answered : B

This is a Level C question

CORRECT Under the step method, service costs are allocated to producing
departments and to other service departments. This method does not
allocate any cost back to the departments whose costs have already
been allocated. This company will allocate Power Department costs
first because the Maintenance Department receives relatively more
service from the Power Department. The amount of Power Department
cost allocated to the Maintenance Department is $12,500 [$62,500 x
(50,000/250,000)]. This allocation is based on the total kilowatt
hours used by all the departments (service and production).

No of correct respondees to this question : 37 out of 65

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Questions # 21
The loan department of financial corporation makes loans to business.
The costs of processing these loans are often several thousand
dollars. The costs for each loan, which include labor, telephone, and
travel, are significantly different accross loans. Some loans require
the use of outside services such as appraisals, legal services, and
consulting services, whereas other loans do not require these
services. The most appropriate cost accumulation method for the loan
department of the corporation is
A. Job-order costing
B. Process costing
C. Differential costing
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D. Joint product costing
You have answered : B
This is a Level A question

WRONG Job-order costing is used by companies who products or services are

readily identified by individual units or a specific job, each of
which receives varying amounts and types of input. The dissimilarity
of the various loan services provided makes job-order costing
appropriate.
No of correct respondees to this question : 35 out of 65
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Questions # 22
The normal spoilage rate for a company is 5% of normal input. A
current job consisted of 31,000 total units of which 28,500 good units
were produced and 2,500 units were defective. The amount of abnormal
spoilage on this job is
A. 950 units
B. 1,000 units
C. 1,075 units
D. 1,550 units

You have answered : C

This is a Level B question

WRONG Normal input (input for the good units and normal spoilage) is
calculated by dividing the good units produced by the proportion left
after the spoiled units are removed, or 95% (100%-5%). Thus the
normal input is the input for 30,000 units (28,500x100/95), normal
spoilage is 1,500 units (30,000-28,500) and abnormal spoilage is the
difference between total and normal spoilage [(31,000-28,500)-1,500].
No of correct respondees to this question : 6 out of 65

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Questions # 23
23. New-Rage Cosmetics has used a traditional cost accounting
system to apply quality control costs uniformly to all products at a
rate of 14.5% of direct labor cost. Monthly direct labor cost for
Satin Sheen makeup is $27,500. In an attempt to distribute quality
contorl costs more equitably, New-Rage is considering activity-based
costing. The monthly data shown in the chart below have been gathered
for Satin Sheen makeup.

Activity Cost Driver Cost Rates Qty. for

Satin Sheen
-------- ----------- ---------- -----------
Incoming Type of $11.50 per 12 types
Material Material type
Inspection
In-process No. of Units $0.14 per 17,500 units
Inspection units
Product
Certification Per order $77 per order 25 orders

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The monthly quality control cost assigned to Satin Sheen makeup using
activity-based costing is

A. $88.64 per order

B. $525.50 lower than the cost using the traditional
system
C. $8500.50
D. $525.50 higher than the cost using the traditional system

You have answered : B

This is a Level B question
WRONG ABC identifies the causal relationship between the incurrence of cost
and activities, determines the drivers of the activities, establishes
cost pools related to the drivers and activities, and assigns costs to
ultimate cost objects on the basis basis of the demands (resources or
drivers consumed) placed on the activities by those cost objects.
Hence, ABC assigns overhead costs based on mulitple allocation bases
or cost drivers. Under the traditional single-base system, the amount
allocated is $39,987.50 ($27,500x14.5%). Under ABC, the amount
allocated is $4,513 [($11.50x12)+($0.14x17,500)+($77x25)], or $525,50
more than under the traditional system.
No of correct respondees to this question : 36 out of 65

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Questions # 24
24. The use of activity-based costing normally results in

A. Substantially greater unit costs for low-volume products than is

reported by traditional product costing.
B. Substantially lower unit costs for low-volume products than is
reported by traditional product costing.
C. Decreased setup costs being charged to low-volume products.
D. Equalizing setup costs for all product lines.
You have answered : D

This is a Level A question

WRONG ABC differs from traditional product costing because it uses multiple
allocation bases and therefore allocates overhead more accurately.
The result is that ABC often charges low-volume products with more
overhead than a traditional system. For example, the cost of machine
setup may be the same for production runs of widely varying sizes.
This relationship is reflected in an ABC system that allocates setup
costs on the basis of the no. of setups. However, a traditional
system using an allocation base such as machine hours may
underallocate setup costs to low-volume products. Many companies
adopting ABC have found that they have been losing money on
low-volume products because costs were actually higher than
origianlly thought.

No of correct respondees to this question : 29 out of 65

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Questions # 25
25. Claremont Company has been asked to evaluate the profitability of
a product that it manufactured from 1997 to 2000. The product had a
one year warranty from the date of sale. The following information
appears in the financial records.
7
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Reseach, development, and design cost (1995 and 1996): $1,000,000
Manufacturing and distribution costs (1997-2000): $2,000,000
Warranty cost (1997-2000): $100,000
Warranty cost (2001): $300,000
The life cycle cost for the product is:
A. $1,000,000
B. $3,000,000
C. $3,100,000
D. $3,400,000
You have answered : D
This is a Level B question

CORRECT Life cycle cost =

$1000,000+$2,000,000+$100,000+$300,000=$3,400,000.
No of correct respondees to this question : 40 out of 65
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Questions # 26
ALF Co. is an assisted-living facility that provides services in the
form of residential space, meals, and other occupant assistance (OOA)
to its occupants. ALF currently uses a traditional cost accounting
system that defines the service provided as assisted living, with
service output measured in terms of occupant days. Each occupant is
charged a daily rate equal to ALF's annual cost of providing
residential space, meals, and OOA divided by total occupant days.
However, an activity-based costing (ABC) analysis has revealed that
occupants' use of OOA varies substantially. This analysis determined
that occupants could be grouped into three categories (low, moderate,
and high usage of OOA) and that the activity driver of OOA is nursing
hours. The driver of the other activities is occupant days. The
following quantitative information was also provided:
Occupant Annual Annual Category
Occupant Days Nursing Hours
-------- -------------- -------------
Low usage 36,000 90,000
Medium usage 18,000 90,000
High usage 6,000 120,000
---------- ----------
60,000 300,000
========== ==========

The total annual cost of OOA was $7.5 million, and the total annual
cost of providing residential space and meals was $7.2 million.
Accordinly, the ABC analysis indicates that the daily cosing rate
should be:
A. $182.50 for occupants in the low-usage category.
B. $145.00 for occupants in the medium-usage category.
C. $245.00 for occupants in the high-usage category.
D. $620.00 for all occupants.

You have answered : C

This is a Level C question

WRONG This service organization produces three "products" (the three

occupant categories), and the "units produced" equal occupant days.
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According to the ABC analysis, production involves 2 activities: (1)
provision of residential space and meals and (2) OOA. The drivers of
this activities are occupant days and nursing hours, respectively.
Thus, the cost pool rate for the first activity (residential space and
meals) is $120 per occupant day ($7,200,000/60,000 days), and the cost
pool rate for the second activity (OOA) is $25 ($7,500,000/300,000
hours). The total cost for providing services to occupants in the
low-usage category is $6,570,000 [($120 x 36,000 days) + ($25 x 90,000
hours)]. The daily cost rate for these occupants is therefore $182.50
($6,570,000/36,000 occupant days).
No of correct respondees to this question : 17 out of 65
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Questions # 27
Three commonly employed systems for product costing are termed job
order costing, operations costing, and process costing. Match the
type of production environment with the costing method used:
Job-order Operations Process
Costing Costing Costing
=========== ============== ==============
A. Auto Clothing Oil
repair manufacturing refining

B. Loan Drug Custom

processing manufacturing printing

C. Custom Paint Paper

printing manufacturing manufacturing

D. Engineering Auto Motion picture

design assembly production

You have answered : B

This is a Level B question

WRONG Job order costing is appropriate when producing products with

individual characteristics and/or when identifiable groupings are
possible. Process costing should be used to assign cost to similar
products that are mass produced on a continuous basis. Operations
costing is a hybrid of job order and process costing systems. It is
used by companies that manufacture goods that undergo some similar
and some dissimilar processes. Thus job order costing would be
approprate for auto repair, operations costing for clothing and
manufacturing, and process costing for oil refining.

No of correct respondees to this question : 31 out of 65

**********************************************************************
Questions # 28
A company procudes stereo speakers for automobile manufacturers..
The automobile manufacturers emphasize total quality control (TQC) in
their production processes and reject approximately 3% of the stereo
speakers received as being of unacceptable quality. The company
inspects the rejected speakers to determine which ones should be
reworked and which ones should be discarged. The discarded speakers
are classified as:
A. Waste.
B. Scrap.
C. Spoilage.
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 kamal akht.1C2
D. Rework costs.
You have answered : D
This is a Level A question

WRONG Rejected units that are discarded are classified as spoilage.

Spoilage is seperated into abnormal or normal spoilage. Normal
spoilage is an inherent result of the normal production process.
Abnormal spoilage is spoilage that is not expected to occur under
normal, efficient operating conditions.
No of correct respondees to this question : 31 out of 65
**********************************************************************
Questions # 29
In terms of financial performance, you would expect revenue growth,
negligible profits, negative cash flows, and negative return on assets
during which stage of an organization's life cycle.

A. Growth stage
B. Maturity stage
C. Decline stage
D. Start-up stage

You have answered : D

This is a Level A question

CORRECT Revenue growth, negligible profits, negative cash flows, and negative
return on assets are common during an organization's start-up stage.
This is in contrast to the growth stage, maturity stage, and decline
stage.

No of correct respondees to this question : 36 out of 65

**********************************************************************
Questions # 30
The concept of value added is best described as:

A. A series of transactions between employes to deliver an end product

to external customers and external suppliers.
B. A series of transactions between employees or between internal
customers and internal suppliers to deliver an end product.
C. Activities that convert resources into product and services
consistent with external customer requirements.
D. Activities that can be eliminated with no deterioration in product
service, funtionality, performance, or quality in the eyes of the end
user.
You have answered : B
This is a Level A question
WRONG Value added refers to activities that convert resources into product
and services consistent with external customer requirements. The goal
of the customer-supplier value chain is to integrate value into every
aspect of a work process.
No of correct respondees to this question : 30 out of 65
**********************************************************************
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 kamal akht.1C2
Questions # 31
Starr Company uses material requirement planning (MRP) and
manufactures a product with the following product structure tree
X
|
------------------
| |
A(2) B(5)
| |
| --------------
| | |
C(1) D(3) E(2)
Starr has just received an order for 100 units of X, the finished
product. The company has 20 units of X,100 units of B, and 50 units
of E in inventory. How many units of E must Starr purchase in order
to fill the order?

A. 550
B. 830
C. 1,000
D. 800

You have answered : C

This is a Level C question

WRONG Product X needed to fill the order: (100-20)=80.

Product B needed to fill the order : 80x5=400.
Product B to be manufactured: 400-100=300
Product E needed to fill the order: 300x2=600
Product E to be purchased: 600-50=550

No of correct respondees to this question : 40 out of 65

**********************************************************************
Questions # 32
Backflush costing systems can differ in terms of:

I. The number of trigger points for recording journal entries.

II. The placement of trigger points for recording journal entries.
A. I only.
B. II only.
C. I and II.
D. Neither I nor II.
You have answered : B
This is a Level B question

WRONG There are several versions of backflush costing systems. Each differs
in terms of the number of trigger (or pay) points for recording
journal entries, and the points at which those trigger occur.

No of correct respondees to this question : 22 out of 65

**********************************************************************
***********************************YOUR SCORE
REPORT********************************************
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 kamal akht.1C2
Correct Answer : 8
Incorect answer : 24
Unanswered : 0
Percentage correct : 25

Status: Sorry! you have failed to receive a passing score

************************** Our understanding of the
student**********************************
Dear kamal akht
You have answered 31 percentage of Level A questions
and hence your basic understanding of the concepts needs improvement. Less than 85%
proficiency in this area is not acceptable. You need to view the class Videoes more

often and study the IMA textbooks followed by fast rehersal of the Participant
Guide
and the IPFC classnotes.

I further see that your sore is below 50% in this area. You need to double your
commitment, time and you can not afford to miss any class. You need more attention
and counselling from me. Your focus as a CMA student has sill not come for the exam.
ANUP was in this zone a month back and he has done some mental adjustments and I

advise you to talk to him to know how he made the turnaround.

You have correctly answered 23 %age of Level B

questions and hence, you are NOT doing well with Level B questions. A score below
75%
in level B can be risky if you do not perform well in Level C and Essay areas.

You need to give yourself more time for solving the MCQs from IMA text and by doing
repetitive practice. You need to reach to 90% correction level in IMA examprep
questions. Presently, you are not performing well with questions that are slightly
more difficult than direct questions.

Since you have not attained the fundamental clarity level in Level A, this is
stopping
you from performing well in Level B.

YOu have correctly answered 17 %age of Level C

questions and hence you are NOT doing well with Level C questions. A score below 70%
in
level C can be risky if you do not perform well in Essay area.

You need to give yourself more time for solving the difficult MCQs and comprehensive
problems from IMA text/Software and by doing repetitive practice,You need to reach
to 90% correction level in IMA examprep questions. Presently, you are not performing
well with questions that require application of concepts,comprehension and
synthesis.
**********************************************************************
----------------------------------------------------------------------
This Exam Rank : 60/65
Percentage correct : 25
Percentile position : 8
Last Exam Rank : NOT Applicable
Last Exam %correct : NOT Applicable
Last Exam Percentile: NOT Applicable
FIRST 5 Results
----------------
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 kamal akht.1C2
Name Rank Correct Percentile Percentage
--------------------------------------------------
Shyam Pras 1 29 98.5 90.6
Muneeb Moh 2 28 96.9 87.5
Edwin 3 28 95.4 87.5
Jyoti Maur 4 27 93.8 84.4
Talal 5 26 92.3 81.3
Last 3 results
63 7 3.1 21.9
64 5 1.5 15.6
65 5 0.0 15.6
**********************************************************************
Area-wise strength-weakness report
**********************************************************************
Area No of Questions Correct Wrong %age correct
------------------------------------------------------------
Measurement Con 1 1 0 100
ABC Costing 4 0 4 0
Overhead Allocn 5 1 4 20
Cost Systems 6 0 4 33
SpolgScrapRewrk 3 1 2 33
Joint/ByProduct 7 1 6 14
LifeCycleCostg 3 2 1 67
Cost of Quality 1 0 1 0
BusiProcPerfomn 1 0 1 0
OpernlEfficincy 1 0 1 0
**********************************************************************


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