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ETS MAJOR FIELD TEST IN BUSINESS Questions and Answers
with Solutions UPDATED!!!
In marketing research, a firm might consider using secondary
data over primary data because
a) secondary data usually cost less
b) secondary data are usually more accurate
c) primary data are usually non specific
d) primary data are likely to be outdated - ANSWER a)
secondary data usually cost less
In organizational decision making, managers are able to exercise
the greatest degree of discretion in the
a) enforcement of internal policies
b) settlement of legal disputes
c) restructuring of outstanding loans
d) compliance with federal regulations - ANSWER a)
enforcement of internal policies
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The term "net working capital" refers to
(A) inventories, receivables, and current notes and investments
(B) assets divided by liabilities
(C) current assets less short-term liabilities
(D) net assets left over after subtracting cost of goods sold -
ANSWER (C) current assets less short-term liabilities
Dreamland Pillow Company sells the "Old Softy" model for $20
each. One pillow requires two pounds of raw material and one
hour of direct labor to manufacture.
Raw material costs $3 per pound and direct production labor is
paid $4 per hour. Fixed supervisory costs are $2,000 per month
and Dreamland rents its factory on a five-year lease for $4,000
per month. All costs are considered costs of production.
How many pillows must Dreamland produce and sell each
month to earn a monthly gross profit of $1,000?
(A) 300
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(B) 350
(C) 600
(D) 700 - ANSWER (D) 700
VC = (2 lbs*$3)+$4 = $10
FC = $2,000+$4,000 = $6,000
CM per unit = $20-(VC) $10=$10
$1,000 = (units sold*$10)-$6,000
Units sold = ($1,000+$6,000)/$10 = 700 pillows
Dreamland Pillow Company sells the "Old Softy" model for $20
each. One pillow requires two pounds of raw material and one
hour of direct labor to manufacture.
Raw material costs $3 per pound and direct production labor is
paid $4 per hour. Fixed supervisory costs are $2,000 per month
and Dreamland rents its factory on a five-year lease for $4,000
per month. All costs are considered costs of production.
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Another firm has offered to produce "Old Softy" pillows and sell
them to Dreamland for $12 each. Dreamland cannot avoid the
factory lease payments, but can avoid all labor costs if it does
not produce these pillows. Under these conditions, how many
"Old Softy" pillows must Dreamland sell to earn monthly gross
profits of $1,000?
(A) 417
(B) 500
(C) 625
(D) 875 - ANSWER (C) 625
Dreamland VC per unit = $12
FC = $4,000
CM per unit = $20-(VC) $12=$8
(GP) $1,000 = (units sold*$8)-$4,000
Units sold = ($1,000+$4,000)/$8 = 625 pillows
Which of the following statements about a systems flowchart is
true?
ETS MAJOR FIELD TEST IN BUSINESS Questions and Answers
with Solutions UPDATED!!!
In marketing research, a firm might consider using secondary
data over primary data because
a) secondary data usually cost less
b) secondary data are usually more accurate
c) primary data are usually non specific
d) primary data are likely to be outdated - ANSWER a)
secondary data usually cost less
In organizational decision making, managers are able to exercise
the greatest degree of discretion in the
a) enforcement of internal policies
b) settlement of legal disputes
c) restructuring of outstanding loans
d) compliance with federal regulations - ANSWER a)
enforcement of internal policies
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The term "net working capital" refers to
(A) inventories, receivables, and current notes and investments
(B) assets divided by liabilities
(C) current assets less short-term liabilities
(D) net assets left over after subtracting cost of goods sold -
ANSWER (C) current assets less short-term liabilities
Dreamland Pillow Company sells the "Old Softy" model for $20
each. One pillow requires two pounds of raw material and one
hour of direct labor to manufacture.
Raw material costs $3 per pound and direct production labor is
paid $4 per hour. Fixed supervisory costs are $2,000 per month
and Dreamland rents its factory on a five-year lease for $4,000
per month. All costs are considered costs of production.
How many pillows must Dreamland produce and sell each
month to earn a monthly gross profit of $1,000?
(A) 300
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(B) 350
(C) 600
(D) 700 - ANSWER (D) 700
VC = (2 lbs*$3)+$4 = $10
FC = $2,000+$4,000 = $6,000
CM per unit = $20-(VC) $10=$10
$1,000 = (units sold*$10)-$6,000
Units sold = ($1,000+$6,000)/$10 = 700 pillows
Dreamland Pillow Company sells the "Old Softy" model for $20
each. One pillow requires two pounds of raw material and one
hour of direct labor to manufacture.
Raw material costs $3 per pound and direct production labor is
paid $4 per hour. Fixed supervisory costs are $2,000 per month
and Dreamland rents its factory on a five-year lease for $4,000
per month. All costs are considered costs of production.
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Another firm has offered to produce "Old Softy" pillows and sell
them to Dreamland for $12 each. Dreamland cannot avoid the
factory lease payments, but can avoid all labor costs if it does
not produce these pillows. Under these conditions, how many
"Old Softy" pillows must Dreamland sell to earn monthly gross
profits of $1,000?
(A) 417
(B) 500
(C) 625
(D) 875 - ANSWER (C) 625
Dreamland VC per unit = $12
FC = $4,000
CM per unit = $20-(VC) $12=$8
(GP) $1,000 = (units sold*$8)-$4,000
Units sold = ($1,000+$4,000)/$8 = 625 pillows
Which of the following statements about a systems flowchart is
true?
