- (Exam Topic 1)
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?

1. A. 50 units.
2. B. 60 units.
3. C. 100 units.
4. D. 120 units.

Correct Answer: A

- (Exam Topic 1)
Which of the following is the most likely reason an organization may decide to undertake a stock split?

1. A. To keep stock price constant.
2. B. To keep shareholders' equity constant.
3. C. To increase shareholders' equity.
4. D. To enhance the stock liquidity.

Correct Answer: D

- (Exam Topic 1)
Which of the following is not included in the process of user authentication?

1. A. Authorization.
2. B. Identification.
3. C. Verification.
4. D. Validation.

Correct Answer: A

- (Exam Topic 1)
An organization accumulated the following data for the prior fiscal year: Value of
Percentage of Quarter
Output Produced Cost X
1
$4,750,000 2.9
2
$4,700,000 3.0
3
$4,350,000 3.2
4
$4,000,000 3.5
Based on this data, which of the following describes the value of Cost X in relation to the value of Output Produced?

1. A. Cost X is a variable cost.
2. B. Cost X is a fixed cost.
3. C. Cost X is a semi-fixed cost.
4. D. Cost X and the value of Output Produced are unrelated.

Correct Answer: B

- (Exam Topic 1)
When assessing the adequacy of a risk mitigation strategy, an internal auditor should consider which of the following?
* 1. Management’s tolerance for specific risks.
* 2. The cost versus benefit of implementing a control.
* 3. Whether a control can mitigate multiple risks.
* 4. The ability to test the effectiveness of the control.

1. A. 1, 2, and 3
2. B. 1, 2, and 4
3. C. 1, 3, and 4
4. D. 2, 3, and 4

Correct Answer: C