An intruder posing as the organization's CEO sent an email and tricked payroll staff into providing employees' private tax information. What type of attack was perpetrated?

• A.Spear phishing attack.
• B.Boundary attack.
• C.Brute force attack.
• D.Spoofing attack.

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During a review of a web-based application used by customers to check the status of their bank accounts, it would be most important for the internal auditor to ensure that:

• A.Sensitive data, such as account numbers, are submitted using encrypted communications.
• B.The web server used to host the application is located in a physically secure area.
• C.Account balance information is encrypted in the database.
• D.Access to read application logs is restricted to authorized users.

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The company receives a special order for 10,000 units at US $7.60. Variable selling cost for each of these 10,000 units will be US $1.20. This special order will not affect regular sales of 75.000 units. If the company accepts this special order, its profit will:

• A.Increase by US $8,000.
• B.Increase by US $16,000.
• C.Decrease by US $4,000.
• D.Decrease by US $12,000.

Correct Answer: B

If the company accepts the special order, its revenue will increase by US $76,000 10,000 units x$7.60). However, its incremental cost will include only the variable costs because fixed manufacturing and selling costs will be unchanged. The increase in cost from accepting the special order is US $L 0,000 [10.000 units $3.00 + $1.00 + $0.80 +$1.20)]. Thus, acceptance of the special order will increase profits by US $16,000 $76,000 $60,000). A company manufactures and sells a single product. It takes two machine hours to produce unit. Annual sales are expected to be 75,000 units. Annual production capacity is 200,000 machine hours. Expected selling price is US $10 price unit. Cost data for manufacturing and selling the product are as follows:

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If the organization uses the traditional full cost system, the cost per unit for this product for the coming year will be:

• A.US $5.39
• B.US $5.44
• C.US $6.11
• D.US $6.95

Correct Answer: C

Given that manufacturing overhead is applied on the basis of machine hours, the overhead rate is US $60 per hour $1,800.000 - 30,000) or US $.96 per unit [80 machine hours per batch x $60) - 5,000 units per batch]. Accordingly, the unit full cost is US $6.11 $5.15 unit price cost + $.96). Believing that its traditional cost system may be providing misleading information. an organization is considering an activity-based costing ABC) approach. It now employs a full cost system and has been applying its manufacturing overhead on the basis of machine hours. The organization plans on using 50.000 direct labor hours and 30,000 machine hours in the coming year. The following data show the manufacturing overhead that is budgeted.

Cost, sales, and production data for one of the organization' s products for the coming year are as follows:

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All of the following are true with regard to the first-in, first-out inventory valuation method except:

• A.It approximates the physical flow of goods.
• B.It generates the highest profit when prices are rising.
• C.It minimizes current-period income taxes.
• D.It values inventory close to current replacement cost.

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