BUS 475 Final Exam A+ Complete Solution Guide 5. Get an A++.
1) A well-designed activity-based costing system starts with __________.
2) “Generally accepted” in the phrase generally accepted accounting principles means that the principles __________.
3) The income statement and balance sheet columns of Pine Company’s worksheet reflects the following totals:
Income Statement Balance Sheet
Dr. Cr. Dr. Cr.
Totals $58,000 $48,000 $34,000 $44,000
The net income (or loss) for the period is __________.
4) These are selected account balances on December 31, 2008.
Land (location of the corporation’s office building) $150,000
Land (held for future use) 225,000
Corporate Office Building 900,000
Office Furniture 150,000
5) The first step in activity-based costing is to __________.
6) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of
$100,000. How much is Hess’s break even point?
7) Sam’s Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000,
$7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is
still on hand. What is Sam’s gross profit for March?
8) These are selected account balances on December 31, 2008.
Land (location of the corporation’s office building) $100,000
Land (held for future use) 150,000
Corporate Office Building 600,000
Office Furniture 100,000
Accumulated Depreciation 300,000
What is the net amount of property, plant, and equipment that will appear on the balance sheet?
9) The income statement and balance sheet columns of Pine Company’s worksheet reflects the following totals:
Income Statement Balance Sheet
Dr. Cr. Dr. Cr.
Totals $58,000 $48,000 $34,000 $44,000
Closing entries are necessary for __________.
10) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to
achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the
following items would be classified as manufacturing overhead?
11) The cost of an asset and its fair market value are __________.
12) One of Astro Company’s activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400
setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?
13) The cost principle is the basis for preparing financial statements because it is __________.
14) Which one of the following items is not generally used in preparing a statement of cash flows?
15) To move the allocation of resources closer to the social optimum, policymakers should typically try to induce firms in an oligopoly to
16) Assume oligopoly firms are profit maximizers, they do not form a cartel, and they take other firms’ production levels as given. Then in
equilibrium the output effect __________.
17) The price of a good that prevails in a world market is called the
18) A country’s consumption possibilities frontier can be outside its production possibilities frontier if __________.
19) When, in a particular market, the law of demand and the law of supply both apply, the imposition of a binding price ceiling in that
market causes quantity demanded to be __________.
20) If a binding price ceiling were imposed in the computer market, __________.
21) For a college student who wishes to calculate the true costs of going to college, the costs of room and board __________.
22) In the market for foreign-currency exchange in the open economy macroeconomic model, the amount of net capital outflow represents
the quantity of dollars __________.
23) The part of the balance of payments account that records the amount of foreign currency the government buys or sells is the:
24) The balance of payment account is made up of:
25) The model of aggregate demand and aggregate supply explains the relationship between __________.
26) The open-economy macroeconomic model includes __________.
27) The principal lag for monetary policy __________.
28) Which of the following best describes a mental image of a possible and desirable future state of the organization?
29) Sebastian Stabilio just joined a team of people from throughout his organization whose primary task is to recommend valuable uses for
the scrap generated in the manufacturing process. The team meets twice per week; otherwise members work within the usual
organizational structure. The team, not permanent, which Sebastian has joined, would be considered a:
30) An invisible barrier that makes it difficult for certain groups, such as minorities and women, to move beyond a certain level in the
organizational hierarchy is referred to as the:
31) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in
addition to gender, race, ethnicity and nationality is:
32) Which of the following has proven to be a particularly good predictor for jobs that require cognitive complexity?
33) To be competitive in a global economy, Europeans must increase their level of:
34) Teams that operate separately from the regular work structure and exist temporarily are known as:
35) A manager’s ability to stimulate people to be high performers is referred to as:
36) The best way for an employer to find out if a potential employee can do a job is by __________.
37) Your roommate is interested in starting a business and everybody has been giving him different information about being an
entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
38) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States.
39) One of the most important contributors to total quality management has been the introduction of statistical tools to analyze the causes
of product defects in an approach called:
40) __________ is the process of working with people and resources to accomplish organizational goals.
41) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze
their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each
area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
42) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and
Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Assuming b1 is significant, if Income decreases by 1000 we would predict that Crime will __________.
43) Sampling error can be reduced by __________.
44) Use the following table to answer question:
P(M A) is approximately _____.
45) Use the following table to answer question:
Are Service provider and county independent events?
46) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5,
1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
47) Jolly Blue Giant Health Insurance (JBGHI) is concerned about rising lab test costs and would like to know what proportion of the
positive lab tests for prostate cancer are actually proven correct through subsequent biopsy. JBGHI demands a sample large enough to
ensure an error of ± 2% with 90% confidence. What is the necessary sample size?
48) Which one of the following statements concerning production and staffing plans is best?
49) Likely reasons for inaccurate control limits would include which of the following?
50) The one-worker, multiple machines approach functions as:
51) In an activity-on-node [AON] network, the nodes represent ____________, whereas the arcs represent ____________.
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours
with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
53) The force behind globalization in _____ was the amount of muscle, horsepower, wind power, or steam power that a country could
54) In the _____ phase of the decision making process, managers test potential solutions “on paper.”
55) A set of programs that enable the hardware to process data is _____.
56) What is _____ is not necessarily _____.
57) The Global, Web-Based Platform enables individuals to do which of the following?
58) The management cockpit best exemplifies which type of system?
59) _____ is the acquisition and efficient use of resources in accomplishing organizational goals.
60) International Game Technology’s new ERP system produced all of the following benefits except:
61) Which of the following are not provided by digital dashboards?
62) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
63) An increase in future value can be caused by an increase in the __________.
64) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash
flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of
return) for each source of financing is as follows:
Cost of debt 8%
Cost of preferred stock 12%
Cost of common stock 16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present
value of this project?
A. $1,568 B. $463 C. $1,241 D. $871
65) Disadvantages of using current liabilities as opposed to long-term debt include:
66) Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM,
what is the required return on this stock?
67) Dublin International Corporation’s marginal tax rate is 40%. It can issue three-year bonds with a coupon rate of 8.5% and par value
of $1,000. The bonds can be sold now at a price of $938.90 each. The underwriters will charge $23 per bond in flotation costs. Determine
the approximate after-tax cost of debt for Dublin International to use in a capital budgeting analysis.
68) Forward rates are quoted:
69) Tri State Pickle Company preferred stock pays a perpetual annual dividend of 2 1/2% of its par value. Par value of TSP preferred
stock is $100 per share. If investors’ required rate of return on this stock is 15%, what is the value of per share?
70) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
71) According to the hedging principle, permanent assets should be financed with _____ liabilities.
72) Exchange rate risk:
73) The common stockholders are most concerned with:
74) Which of the following is most consistent with the hedging principle in working capital management?
75) You hold a portfolio with the following securities:
Security Percent of Portfolio Beta Return
X Corporation 20% 1.35 14%
Y Corporation 35% .95 10%
Z Corporation 45% .75 8%
Compute the expected return and beta for the portfolio.
76) Economists’ economic-buyer theory assumes that __________.
77) The statement, “Of course people will buy our product–each of its features is better than the competition,” most closely reflects which
consumer behavior concept?
78) The three basic tasks of ALL managers, according to the text, are:
79) A cluster analysis of the “toothpaste market” would probably show that:
80) “Marketing strategy planning” means:
81) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities
82) Regarding organizational buying, the people who have the power to select or approve the supplier–especially for larger purchases–are
83) The economists’ view of buyers:
84) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A. Customer relationship management (CRM)
B. Market scanning C. Positioning D. Brand familiarity E. Market segmentation
85) When evaluating macro-marketing:
A. one must consider the society’s role in the marketing system. B. one must determine how efficiently the society’s resources are used.
C. the best approach is to consider the profit generated by individual firms within the overall system.
D. the evaluation is necessarily subjective. E. one must consider each individual firm’s role in the marketing system.
A. not important if you have a good product. B. reflects existing social values in the short run–while reinforcing these values in the long
C. turns consumers into puppets. D. creates materialistic values which did not exist before. E. is only propaganda.
87) Clustering techniques applied to segmenting markets __________.
A. doesn’t apply to demographic data B. eliminate the need for marketing managers to specify in advance what dimensions might be
relevant for grouping consumers
C. remove the need for managerial judgment D. usually require computers to group people based on data from market research
E. is time consuming and expensive
88) Product disparagement differs from defamation of a nonpublic figure in that:
A. Intent is only required in a disparagement case. B. Publication to a third party is required in the defamation case, but not in the
C. Publication to a third party is required in the disparagement case, but not in the defamation case.
D. Intent is required for the disparagement case, but not in the defamation case.
E. Intent is required for the defamation case, but not in the disparagement case.
89) Mary arrived at work one day, and her boss said to her, “That’s the ugliest dress I have ever seen. Because you wore that to work
today, you are fired.” Assuming that Mary is an at-will employee, which of the following is true?
A. Mary can be fired only if it is in the best interest of the employer. B. If none of the exceptions to the at-will rule apply, Mary can be
fired. C. If Mary has the will to work, she cannot be fired without cause. D. Mary can be fired for any reason.
90) Which of the following is correct about interpretive rules?
A. Interpretive rules are not subject to judicial review. B. All federal administrative agencies have implied power to make interpretive
91) In responding to a constitutional challenge to the Computer Decency Act, the U.S. Supreme Court ruled that:
92) In a criminal proceeding, what is the difference between an indictment and an information?
93) Which social responsibility theory has been advocated by Novel Prizewinning economist Milton Friedman?
94) If a minor wishes to be bound to a contract after becoming an adult, she must:
95) Which of the following statements is true regarding the relationship of law and ethics?
96) Information which comes to the knowledge of an agent is:
principal only with the third party’s consent.
97) Which of the following is true about “proof of claims?”
98) Although the U.S. has had a longstanding agreement with _____ after the passage of NAFTA, _____ became the United States’ second
largest trading partner.
99) Which country does the text describe as becoming the largest producer and consumer of many of the world’s goods?
100) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States