Multiple choice questions on CVP analysis, Profitability ratios, Variance analysis.

1.   Garth Company sells a single product that generates a positive contribution margin.  If the selling price per unit and the variable cost per unit both increase 10% and fixed costs do not change, the:

2.   Which of the following statements about pricing policies is TRUE?

a.         Market share and unit volume are synonymous

b.        A firm that forgoes higher profits and wants to satisfy its obligations to its customers and society in general is pursuing a social responsibility policy

c.         Unit volume is not a type of pricing policy because it is a production strategy

d.        Target return is a type of market share policy

3.   Six M&M are left in a candy jar. If two are red and four are green, what is the probability that you randomly select two green ones?

a.         About 7%

b.        About 40%

c.         About 53%

d.        About 60%

4.   Joe Guy worked as a cleaning technician for a local office cleaning service. While cleaning a client's office, he negligently left a vacuum in front of an office door. When the president of the company entered the office the next morning, she tripped and fell over the vacuum. From whom may she recover damages, if anyone?

a.         Joe is the only person liable for his own torts

b.        The cleaning service is liable for the negligent acts of its agent

c.         Both Joe and the cleaning service may be liable

d.        Neither is liable, because a principal and agent are only liable for intentional, not negligent torts

5.   According to Maslow, which of the following needs could be met on the job through the use of work teams, company picnics or company-sponsored sports activities?

a.         Belongingness needs

b.        Safety needs

c.         Esteem needs

d.        Self-actualization need

6.   A company is interested in looking at their profitability using the profitability ratios. They would likely calculate which ratios?

a.         Profit margin, return on assets, and times interest earned

b.        Return on assets, average collection period, and return on equity

c.         Return on assets, profit margin, and return on equity

d.        Receivables turnover, inventory turnover, and times interested earned

7.   If the Federal Reserve sells government securities, you might except:

a.         A decrease in interest rates

b.        An increase in interest rates

c.         An increase in the money supply

d.        A fall in the discount rate

8.   A favorable material variance coupled with and unfavorable material usage variance would most likely be the result of:

a.         Labor efficiency problem

b.        Machine efficiency problem

c.         The purchase and use of higher than standard quality material

d.        The purchase and use of lower then standard quality material

9.   ________ is an outline of the knowledge, skills, education and physical abilities needed to perform a job adequately.

a.         A job analysis

b.        A job preview

c.         A job specification

d.        A job posting

10.  Comparisons of per capital gross domestic product (GDP)between countries:

a.         Do not necessarily provide a good measure of relative living standards

b.        Provide an accurate gauge by which to judge living standards

c.         Provide information about productive capabilities not relative standards of living

d.        Are misleading because countries use totally different methods of calculation GDP