Comp XM verified questions and answers
2026\2027 A+ Grade
Baldwin's EBIT (Earnings Before Interest and Taxes) last year was $21,771,033. What was Baldwin's net
profit?
- correct answer $11,174,773 (go to the Front Page of inquirer and look for Baldwin's EBIT)
Your company expects profits to be close to $4,000,000. The Board has instructed you to increase
retained earnings by approximately $2,000,000. What dividend amount, per share, will you pay this
year.
- correct answer $0.97 (go to Page 2 of Inquirer. Note your company's shares outstanding under the
Shares column. Take $2M [of your projected profit] and divide it by your shares outstanding)
Last year, Chester Company's Cone product had a higher contribution margin percentage compared to
their Creak product. However, Creak contribution margin (in dollars) is much higher. This is because:
- correct answer Creak's sales were substantially higher than Cone's (go to Chester Company's Annual
Report in the Inquirer. Turn to the Income Statement. Notice the difference between Creak's sales and
Cone's sales)
Digby's revenues were $118,965,138 last year. What percentage went to their marketing budgets?
- correct answer 6.5% Promo&Sales divided by Revenue (go to Digby Company's Annual Report in the
Inquirer. Turn to the Income Statement. Find each products' promo and sales budgets and take the sum
of them. Then, take the total and divide it by Digby's total sales)
Consider the cost to separate (terminate) employees at $5,000 per worker (severance pay, etc.).
Consider the cost of training workers at $20 per hour. Consider the cost of recruiting a higher caliber
worker at $3,000. What action would cost Andrews Company the most?
- correct answer Firing a quarter of its workforce (find Andrews current workforce complement on Page
12 of the Inquirer. The cost to fire a quarter of Andrews Company's workforce is .25 * 804 * $5,000 =
$1,005,000. Next, find the number of new employees on the same page. 140 new workers * $3,000 =
$420,000. Then, find the current workforce complement * $20 * 40 = $643,000. Therefore, it costs more
to fire a quarter of Andrews Company's workforce)
2026\2027 A+ Grade
Baldwin's EBIT (Earnings Before Interest and Taxes) last year was $21,771,033. What was Baldwin's net
profit?
- correct answer $11,174,773 (go to the Front Page of inquirer and look for Baldwin's EBIT)
Your company expects profits to be close to $4,000,000. The Board has instructed you to increase
retained earnings by approximately $2,000,000. What dividend amount, per share, will you pay this
year.
- correct answer $0.97 (go to Page 2 of Inquirer. Note your company's shares outstanding under the
Shares column. Take $2M [of your projected profit] and divide it by your shares outstanding)
Last year, Chester Company's Cone product had a higher contribution margin percentage compared to
their Creak product. However, Creak contribution margin (in dollars) is much higher. This is because:
- correct answer Creak's sales were substantially higher than Cone's (go to Chester Company's Annual
Report in the Inquirer. Turn to the Income Statement. Notice the difference between Creak's sales and
Cone's sales)
Digby's revenues were $118,965,138 last year. What percentage went to their marketing budgets?
- correct answer 6.5% Promo&Sales divided by Revenue (go to Digby Company's Annual Report in the
Inquirer. Turn to the Income Statement. Find each products' promo and sales budgets and take the sum
of them. Then, take the total and divide it by Digby's total sales)
Consider the cost to separate (terminate) employees at $5,000 per worker (severance pay, etc.).
Consider the cost of training workers at $20 per hour. Consider the cost of recruiting a higher caliber
worker at $3,000. What action would cost Andrews Company the most?
- correct answer Firing a quarter of its workforce (find Andrews current workforce complement on Page
12 of the Inquirer. The cost to fire a quarter of Andrews Company's workforce is .25 * 804 * $5,000 =
$1,005,000. Next, find the number of new employees on the same page. 140 new workers * $3,000 =
$420,000. Then, find the current workforce complement * $20 * 40 = $643,000. Therefore, it costs more
to fire a quarter of Andrews Company's workforce)
