This document contains 100 multiple choice questions covering a wide range of business topics including managerial accounting, financial statements, economics, marketing, finance, and business law. The questions assess understanding of concepts like inventory costing methods, income statements, GDP, demand and supply, risk/return analysis, and employment law. The breadth of topics covered indicates this is likely a practice exam or set of questions for a general business course final exam.

1. BUS 475 Final Exam set5
1) 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?
2) Managerial accounting __________.
3) The income statement and balance sheet columns of Pine Companys 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) Of the following companies, which one would not likely employ the specific
identification method for inventory costing?
5) The standards and rules that are recognized as a general guide for financial
reporting are called __________.
6) Disney�s variable costs are 30% of sales. The company is contemplating an
advertising campaign that will cost $22,000. If sales are expected to increase $40,000,
by how much will the companys net income increase?
7) Balance sheet accounts are considered to be __________.
8) Multinational corporations __________.
9) What effect do current technology changes have on managerial accounting?
10) The cost principle is the basis for preparing financial statements because it is
__________.
11) Which one of the following items is not generally used in preparing a statement of
cash flows?
12) The cost of an asset and its fair market value are __________.
13) One of Astro Companys 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?
14) A well-designed activity-based costing system starts with __________.
15) For a college student who wishes to calculate the true costs of going to college, the
costs of room and board __________.
16) In computing GDP, market prices are used to value final goods and services
because __________.
17) In economics, the cost of something is __________.
18) A logical starting point from which the study of international trade begins is
__________.
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
__________.

2. 20) What you give up to obtain an item is called your __________.
21) One characteristic of an oligopoly market structure is:
22) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One
of their contributions was to argue that if a central bank could convince people to
expect zero inflation, then the Fed would be tempted to raise output by increasing
inflation. This possibility is known as __________.
23) In general, the longest lag for __________.
24) The model of short-run economic fluctuations focuses on the price level and
__________.
25) Real GDP __________.
26) Consider two items that might be included in GDP: (1) The estimated rental value
of owner-occupied housing; and (2) purchases of newly-constructed homes. How are
these two items accounted for when GDP is calculated?
27) Which of the following statements about GDP is correct?
28) Which of these refers to the practices aimed at discovering and harnessing an
organizations intellectual resources?
29) 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:
30) Which of the following has proven to be a particularly good predictor for jobs that
require cognitive complexity?
31) When a company establishes technology leadership by pioneering unique products
or services that command premium prices, it has benefited from a:
32) 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:
33) An organization that is managed aggressively and has growth and high profits as
primary objectives may be considered a(n):
34) 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:
35) ABC International carefully watches the actions of its most innovative competitor
and learns from them. ABC can establish a low-cost position by:
36) 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:
37) To be competitive in a global economy, Europeans must increase their level of:
38) A series of quality standards developed by a committee working under the
International Organization for Standardization to improve total quality in all businesses
for the benefit of both producers and consumers is:
39) Teams that work on long-term projects but disband once the work is completed are
known as:
40) The pursuit of lucrative opportunities by enterprising individuals is called:
41) The best way for an employer to find out if a potential employee can do a job is by
__________.

3. 42) A poll showed that 48 out of 120 randomly chosen graduates of California medical
schools last year intended to specialize in family practice. What is the width of a 90%
confidence interval for the proportion that plan to specialize in family practice?
43) Two events are complementary when __________.
44) From its 32 regions, the Federal Aviation Administration selects 5 regions, and
then randomly audits 20 departing commercial flights in each region for compliance
with legal fuel and weight requirements. This is __________.
45) Use the following table to answer question:
Are Service provider and county independent events?
46) 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 __________.
47) Dullco Manufacturing claims that its alkaline batteries last forty hours on average
in a certain type of portable CD player. Tests on a random sample of 18 batteries
showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the studys findings, which of the following is
true?
48) In lean systems, if a defective product is found, which of the following is generally
NOT done?
49) Queuing models use an A/B/C notation. What do these variables represent?
50) Suppose the estimated quadratic model Yt = 500 + 20 t - t2 is the best-fitting trend
of sales of XYZ Inc. using data for the past twenty years (t = 1, 2,.., 20).
Which statement is incorrect?
51) 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:
52) A computer analysis reveals that the best-fitting trend model is Yt = 4.12 e 0.987 t.
The trend was fitted using year-end common stock prices for Melodic Kortholt Outlet for
the last six years. The R2 is 0.8571.
Which conclusion is not correct?
53) The Global, Web-Based Platform enables individuals to do which of the following?
54) A set of programs that enable the hardware to process data is _____.
55) _____ is the integration of economic, social, cultural, and ecological facets of life,
enabled by information.
56) What is _____ is not necessarily _____.
57) Which of the following is not a source for external data?
58) The management cockpit best exemplifies which type of system?
59) _____ provides users with a view of what is happening, where _____ addresses why
it is happening.
60) International Game Technology�s new ERP system produced all of the following
benefits except:
61) Which of the following is not a reason that managers need IT support?
62) Credit card companies would most likely use which of the following to check for
fraudulent credit card use?
63) Exchange rate risk:
64) PepsiCo calculates unlevered betas for each peer group in order to:
65) At 8% compounded annually, how long will it take $750 to double?

4. 66) 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?
67) At what rate must $400 be compounded annually for it to grow to $716.40 in 10
years?
68) Which of the following best represents operating income?
69) Given the following annual net cash flows, determine the IRR to the nearest whole
percent of a project with an initial outlay of $1,520.
Year Net Cash Flow
1 $1,000
2 $1,500
3 $ 500
70) Which of the following is most consistent with the hedging principle in working
capital management?
71) Which of the following best represents the stream of income that is available to
common stockholders?
72) A machine costs $1,000, has a three-year life, and has an estimated salvage value
of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next
year. If your required rate of return for the project is 10%, what is the NPV of this
investment? (Round your answerwer to the nearest $10.)
73) 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 appropriate after-tax cost of debt for Dublin International to use in
a capital budgeting analysis.
74) A stock with a beta greater than 1.0 has returns that are _____ volatile than the
market, and a stock with a beta of less than 1.0 exhibits returns which are _____
volatile than those of the market portfolio.
75) Bondholders have a priority claim on assets ahead of:
76) Clustering techniques applied to segmenting markets __________.
77) Economists economic-buyer theory assumes that __________.
78) The difference between target marketing and mass marketing is that target
marketing:
79) Which of the following is a business or organizational customer?
80) In an effort to increase its total sales, Champion has started exporting its spark
plugs for use by several German auto producers. Champion is pursuing a _____
opportunity.
81) "Positioning":
82) The basic objective of the U.S. market-directed economic system is to:
83) A cluster analysis of the "toothpaste market" would probably show that:
84) Marketing:
85) The clustering techniques that can be used in segmenting:
86) An Australian wine producer, facing declining sales at home, set up a new channel
of distribution to sell wine in the United States. This seems to be an effort at:
87) 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?
88) Bob, an employee of Risky Manufacturing, Inc. is accidentally injured by a fellow
worker while working his shift. Under workers� compensation, Bob can:
89) Which of the following statements is not true under the Fair Labor Standards Act?
90) The disclosures required under the Truth-in-Lending Act are required for:
91) Which of the following is correct about litigating commercial disputes?

5. 92) Minimum wages, hours of employment, and child labor are regulated by the:
93) An agent�s duty of notification can best be described as a duty to:
94) Which of the following is correct about the states� powers regarding foreign
affairs?
95) Which of the following is true about trademark registration?
96) What makes a publicly held corporation different from a public corporation?
97) The theory of business social responsibility that holds that a business owes duties
solely to produce the highest return for its shareholders is:
98) One study found that manufacturing labor costs about _____ an hour in China,
compared to _____ dollars in the United States.
99) Which country does the text describe as becoming the largest producer and
consumer of many of the worlds goods?
100) Although the U.S. has had a longstanding agreement with _____ after the passage
of NAFTA, _____ became the United States second largest trading partner.