COMP-XM SAMPLE BOARD QUERY UPDATED
QUESTIONS AND CORRECT ANSWERS
Question:
1. Baldwin's EBIT (Earnings Before In-terest and Taxes) last year was $21,771,033. What was
Baldwin's net profit?
$223,085 $167,340,889 $11,174,773 $10,701,648
Answer:
$11,174,773 Correct! Go to the Front Page of inquirer and look for Baldwin's EBIT.
Question:
2. Your company expects profits to be close to $4,000,000. The Board has instructed you to in-crease
retained earnings by ap-proximately $2,000,000. What div-idend amount, per share, will you pay this
year. $6.40 $1.80 $5.10 $0.97
Answer:
$0.97 Correct! 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.
Question:
3. Last year, Chester Company's Cone product had a higher contribu-tion margin percentage
compared to their Creak product. However, Creak contribution margin (in dol-lars) is much higher.
This is be-cause:
a) Creak's labor and material costs
were substantially higher than Cone's.
b) Cone has no inventory.
c) Creak's sales were substantially
higher than Cone's.
Answer:
c) Creak's sales were substantially higher than Cone's.
Correct! Go to Chester Company's Annual Report in the Inquirer. Turn to the Income Statement.
Notice the differ-ence between Creak's sales and Cone's sales.
Question:
4. Digby's revenues were $118,965,138 last year. What per-centage went to their marketing budgets?
11.1% (SG&A/Revenue) 6.5% (Promo&Sales/Revenue) 3.2% (Promo/Revenue) 3.3%
(Sales/Revenue)
Answer:
6.5% (Promo&Sales/Revenue) Correct! Go to Digby Company's Annual Report in the Inquirer. Turn
to the Income Statement. Find each prod-ucts' promo and sales budgets and take the sum of them.
Then, take the total and divide it by Digby's total sales.
Question:
5. Consider the cost to separate (ter-minate) employees at $5,000 per worker (severance pay, etc.).
Con-sider the cost of training workers at $20 per hour. Consider the cost of recruiting a higher caliber
work-er at $3,000. What action would cost Andrews Company the most?
a) Firing a quarter of its work-
force.
QUESTIONS AND CORRECT ANSWERS
Question:
1. Baldwin's EBIT (Earnings Before In-terest and Taxes) last year was $21,771,033. What was
Baldwin's net profit?
$223,085 $167,340,889 $11,174,773 $10,701,648
Answer:
$11,174,773 Correct! Go to the Front Page of inquirer and look for Baldwin's EBIT.
Question:
2. Your company expects profits to be close to $4,000,000. The Board has instructed you to in-crease
retained earnings by ap-proximately $2,000,000. What div-idend amount, per share, will you pay this
year. $6.40 $1.80 $5.10 $0.97
Answer:
$0.97 Correct! 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.
Question:
3. Last year, Chester Company's Cone product had a higher contribu-tion margin percentage
compared to their Creak product. However, Creak contribution margin (in dol-lars) is much higher.
This is be-cause:
a) Creak's labor and material costs
were substantially higher than Cone's.
b) Cone has no inventory.
c) Creak's sales were substantially
higher than Cone's.
Answer:
c) Creak's sales were substantially higher than Cone's.
Correct! Go to Chester Company's Annual Report in the Inquirer. Turn to the Income Statement.
Notice the differ-ence between Creak's sales and Cone's sales.
Question:
4. Digby's revenues were $118,965,138 last year. What per-centage went to their marketing budgets?
11.1% (SG&A/Revenue) 6.5% (Promo&Sales/Revenue) 3.2% (Promo/Revenue) 3.3%
(Sales/Revenue)
Answer:
6.5% (Promo&Sales/Revenue) Correct! Go to Digby Company's Annual Report in the Inquirer. Turn
to the Income Statement. Find each prod-ucts' promo and sales budgets and take the sum of them.
Then, take the total and divide it by Digby's total sales.
Question:
5. Consider the cost to separate (ter-minate) employees at $5,000 per worker (severance pay, etc.).
Con-sider the cost of training workers at $20 per hour. Consider the cost of recruiting a higher caliber
work-er at $3,000. What action would cost Andrews Company the most?
a) Firing a quarter of its work-
force.
