During 2014, a department's 3-variance overhead standard costing system reported unfavorable spending and volume variances. The activity level selected for allocating overhead to the product was based on 80% of practical capacity. If 100% of practical capacity had been selected instead, how would the reported unfavorable spending and volume variances be affected? Spending variance / Volume variance

During 2014, a department's 3-variance overhead standard costing system reported unfavorable spending and volume variances. The activity level selected for allocating overhead to the product was based on 80% of practical capacity. If 100% of practical capacity had been selected instead, how would the reported unfavorable spending and volume variances be affected?
Spending variance / Volume variance

a. Increased / Unchanged
b. Increased / Increased
c. Unchanged / Increased
d. Unchanged / Unchanged

Answer: C

CPA Exam

Under which of the following circumstances would an auditor be most likely to intensify an examination of a $500 imprest petty cash fund?
A typical objective of an operational audit is for the auditor to
Jones, CPA, examined the 20X5 financial statements of Ray Corp. and issued an unmodified opinion on March 10, 20X6. On April 2, 20X6, Jones became aware of a 20X5 transaction that may materially affect the 20X5 financial statements. This transaction would have been investigated had it come to Jones' attention during the course of the examination. Jones should
Which of the following would detect an understatement of a purchase discount?
Which of the following statements extracted from a client's lawyer's letter concerning litigation, claims, and assessments most likely would cause the auditor to request clarification?
Which of the following procedures most likely could assist an auditor in identifying related-party transactions?
Which of the following steps should an auditor perform first to determine the existence of related parties?
Which of the following ratios would an engagement partner most likely consider in the overall review stage of an audit?
Treetop Corporation acquired a building and arranged mortgage financing during the year. Verification of the related mortgage acquisition costs would be least likely to include an examination of the related
Which of the following statements is correct regarding the predictability of analytical procedures in a financial statement audit?
Which of the audit procedures listed below would be least likely to disclose the existence of related-party transactions of a client during the period under audit?
Which of the following is generally included or shown in the auditor's working papers for the audit of a nonpublic company?
During the first part of the current fiscal year, the client company began dealing with certain customers on a consignment basis. Which of the following audit procedures is least likely to bring this new fact to the auditor's attention?
An auditor who is engaged to examine the financial statements of a business enterprise will request a cutoff bank statement primarily in order to
An example of a transaction which may be indicative of the existence of related parties is
Which of the following items would most likely require an adjustment to the financial statements for the year ended December 31, year 1?
When an auditor decides to confirm accounts receivable balances rather than individual invoices, it most likely would be beneficial to include with the confirmations
The audit working papers often include a client-prepared, aged trial balance of accounts receivable as of the balance sheet date. This aging is best used by the auditor to
Auditors should request that an audit client send a letter of inquiry to those attorneys who have been consulted concerning litigation, claims, or assessments. The primary reason for this request is to provide
Which of the following management assertions is an auditor most likely testing if the audit objective states that all inventory on hand is reflected in the ending inventory balance?
"In connection with an audit of our financial statements, management has prepared, and furnished to our auditors a description and evaluation of certain contingencies." The forgoing passage most likely is from a(n)
Which of the following analyses appearing in a predecessor's working papers is the successor auditor least likely to be interested in reviewing?
Which of the following procedures would an auditor most likely perform prior to the balance sheet date?
A client's procurement system ends with the assumption of a liability and the eventual payment of the liability. Which of the following best describes the auditor's primary concern with respect to liabilities resulting from the procurement system?
When title to merchandise in transit has passed to the audit client, the auditor examining a vendor's invoices as a purchase cutoff on December 31, the last day of the client's year, will encounter the greatest difficulty in gaining assurance with respect to the

Learn More Multiple Choice Question :

Fred Zorn died on June 5, 2015. Bequeathing his entire $6,000,000 estate to his sister, Ida. The alternate valuation date was validly elected by the executor of Fred's estate. Fred's estate included 2,000 shares of listed stock for which Fred's basis was $380,000. This stock was distributed to Ida nine months after Fred's death. Fair market values of this stock were - As the date of Fred's death: $400,000 - Six months after Fred's death: $450,000 - Nine months after Fred's death: $480,000 Ida's basis for this stock is
Rich is a cash-basis self-employed air-conditioning repairman with current year gross business receipts of $20,000. Rich's cash disbursements were as follows: - Air conditioning parts: $2,500 - Yellow Pages listing : $2,000 - Estimated federal income taxes on self-employment income: $1,000 - Business long-distance telephone calls: $400 - Charitable contributions: $200 What amount should Rich report as net self-employment income?
Harold Thompson, a self-employed individual, had income transactions for 2014 (duly reported on his return filed in April 2015) as follows: - Gross receipts: $400,000 - Less cost of goods sold and deductions : $320,000 - Net business income: $80,000 - Capital gains: $36,000 - Gross income 0 $116,000 In November 2015, Thompson discovers that he had inadvertently omitted some income on his 2014 return and retains Mann, CPA, to determine his position under the statute of limitations. Mann should advise Thompson that the six-year statute of limitations would apply to his 2014 return only if he omitted from gross income an amount in excess of
Freeman, a single individual, reported the following income in the current year: - Guaranteed payment from services rendered to a partnership: $50,000 - Ordinary income from an S corporation $20,000 What amount of Freeman's income is subject to self-employment tax?
The following information pertains to Wald Corp's operations for the current year: World wide taxable income : $300,000 US source taxable income: $180,000 US income tax before foreign tax credit: $96,000 Foreign non-business-related interest earned: $30,000 Foreign income taxes paid on non-business-related interest earned: $12,000 Other foreign source taxable income: $90,000 Foreign income taxes paid on other foreign source taxable income: $27,000 What amount of foreign tax credit may Wald claim for the current year?
The following information pertains to Joe Diamond, a cash-method sole proprietor for the current year: - Gross receipts from business: $150,000 - Interest income from personal investments: $10,000 - Cost of goods sold: $80,000 - Other business operating expenses: $40,000 What amount of net earnings from self-employment would be multiplied by the applicable self-employment tax rate to compute Diamond's self-employment tax for the current year?

NAIMMCQ

Share this

Learn More Multiple Choice Question :