Skip to main content
Sign in Create a free account
Varsity Tutors
Sign in Sign up

Practice Test 6 - CPA Bar

20 questions. Answer them in any order, then submit to see your score and every explanation.

  1. The percentage-of-sales method for forecasting financial statements is based on which assumption?
  2. Riverdale Co. has cost per EU: materials $18.00, conversion $14.00. Ending WIP is 4,000 units (100% complete for materials, 50% complete for conversion). What is the total cost assigned to ending WIP?
  3. A company uses job-order costing. Job #445 had a beginning balance of $8,500. During the month, direct materials of $6,200 were requisitioned, 80 direct labor hours were worked at $25 per hour, and overhead is applied at $18 per direct labor hour. What is the ending balance on Job #445's cost sheet?
  4. A company's cash management function includes: a combination safe with access restricted to the treasurer; daily cash counts reconciled to the general ledger; dual custody required for transfers exceeding $25,000; and a mandatory vacation policy requiring two consecutive weeks. Which of these is best classified as a detective control?
  5. A public company, IronGate Logistics, compares its FY2025 performance to industry averages during a year of fuel price volatility and tighter labor availability. IronGate: operating margin 6.0%, asset turnover 1.8x, current ratio 1.1. Industry average: operating margin 8.5%, asset turnover 1.6x, current ratio 1.4. How does the company's financial performance compare to the industry average?
  6. A company's current price is $50, variable cost $30/unit, CM ratio 40%, annual volume 10,000 units, total CM $200,000. A proposed 10% price decrease to $45 is expected to increase volume 20% to 12,000 units. What is the recommended pricing decision?
  7. A pivot table summarizes sales by region: North - Electronics $420,000, Apparel $185,000, Home Goods $310,000; South - Electronics $380,000, Apparel $240,000, Home Goods $195,000. Which product category has the largest absolute variance between the two regions?
  8. Which of the following best describes structured data?
  9. A public company, Nova Apparel, evaluates budget versus actual for FY2025 after shifting to more online sales with higher returns processing costs. Budget vs actual: Revenue $310M vs $322M; Gross margin 44% vs 41%; Fulfillment expense $38M vs $47M; Customer service expense $12M vs $14M; Operating income $86M vs $71M. Which variance is most significant and why?
  10. A manufacturing overhead department report shows: flexible budget overhead at 5,000 actual machine hours = $75,000 (variable $30,000 + fixed $45,000). Actual overhead = $76,500 (variable $32,500 + fixed $44,000). What is the total overhead spending variance?
  11. A preferred stock pays a fixed annual dividend of $5,000 indefinitely. The required rate of return is 8%. What is the present value of this perpetuity?
  12. Stonewall Corp. has current assets of $480,000 and current liabilities of $160,000. What is the current ratio?
  13. Riverdale Co. has total conversion costs to account for of $280,000 and equivalent units of production for conversion of 20,000. What is the cost per equivalent unit for conversion costs?
  14. Which of the following statements provides the most accurate interpretation of these results for predicting future overhead costs?
  15. Under the COSO framework, what is the primary distinction between ongoing monitoring activities and separate evaluations?
  16. A call center handles 8,000 calls in a month and resolves 5,600 on the first contact. What is the first-call resolution (FCR) rate?
  17. A company's balanced scorecard learning and growth perspective shows declining scores on employee training hours, internal promotion rates, and technology investment per employee. Financial margins remain strong. Which interpretation is most analytically complete?
  18. Ridgemont Co.'s ABC rates are $600 per setup and $300 per engineering hour. The Deluxe product uses 400 setups and 200 engineering hours. What is the total ABC overhead allocated to the Deluxe product?
  19. A company's quarterly sales for five consecutive quarters are $400,000, $420,000, $440,000, $460,000, and $480,000. Using the linear trend in this data, what is the estimated sales figure for Quarter 6?
  20. A break-even sensitivity analysis shows the project becomes unviable (NPV = 0) when annual cash flows fall to $316,840. The base-case annual cash flow is $400,000. What is the maximum percentage decline in cash flows the project can sustain before it becomes unviable?

Practice tests