BUS 475 Final Exam Answers
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New BUS 475 Content for 2016 (50+ New Answers)
Jay stops at the shopping mall to purchase a new pair of jeans from the Diesel store. He is the ultimate consumer in a pipeline from the producer through intermediaries, including the clothing store. This pipeline is actually a__________.
Explanation: A marketing channel is simply a path that enables to producer to gets its product to the final consumer.
Fred takes Betty to dinner at a very expensive and exclusive restaurant. The menu does not mention prices. The server takes their order, and both Betty and Fred enjoyed the meal immensely. When the bill comes, Fred refuses to pay because the menu had no prices and because he and the server never engaged in language indicating an offer and acceptance. The server said, “Are you ready to order?” and when Fred said “Yes,” the server merely asked, “What may I get you tonight?”
Fred must pay based on an implied-in-fact contract theory.
Explanation: Despite the lack of prices or verbal agreement, there is an implied contract when a person places an order for food at a restaurant. This societal convention is enough to make a valid contract.
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The reason economists and accountants have problems using cost analysis in the real world is that
although implicit costs do not show up in accounting profits, they nevertheless affect managerial decisions
Explanation: Implicit costs occur when an asset is used internally, rather than for direct cash flow. These costs affect decisions, but cannot be quantitatively measured.
A standardized language used to manipulate data is
a data manipulation language
Explanation: Data manipulation languages are essential for virtually all computer programming applications.
Which of the following is an ethical issue?
Business Process Reengineering
Explanation: Business processes can be redesigned to offer higher levels of social benefits, environmental sustainability, and stakeholder integration.
What are the benefits of using IM in business communication?
The Oviedo Thespians are planning to present performances of their Florida Revue on two consecutive nights in January. It will cost them $5,000 per night for theater rental, event insurance, and professional musicians. The theater will also take 10% of gross ticket sales. How many tickets must they sell at $10.00 per ticket to break even?
Explanation: Breakeven = 10000 / (10 – 1) = 1111.11 = 1112 Tickets
Suppose Stock A has had a mean price of $6.58 per share with a standard deviation of $1.88, while Stock B has had a mean price of $10.57 per share with a standard deviation of $3.02. Which stock shows a higher coefficient of variation or volatility?
Both stocks have the same coefficient of variation.
Explanation = Stock A = 1.88 / 6.58 = .285714
Stock B = 3.02 / 10.57 = .285714
A distribution center for a chain of electronics supply stores fills and ships orders to retail outlets. A random sample of orders is selected as they are received and the dollar amount of the order
64) Which statement attempts to show the earnings of the firm’s operations over a specific time period?
Explanation: The income statement will generally show how much a company has earned on a quarterly or annual basis.
65) Let’s say a machine costs $1,000, has a three-year life, and has an expected salvage value of $100. It will produce after-expense twelve-month cash flows (ACF) of $600 per year, beginning one year from now. Provided that your needed rate of return for the task is 10%, what is the NPV (Net Present Value) of this investment product?
Explanation: NPV is calculated using the formula: Rt (1 + i)^2. In this case the NPV is determined be $570 when the required return is 10%.
66) What are some of the disadvantages of using current liabilities versus long-term debt?
Greater risk of illiquidity, and uncertainty of interest costs
Explanation: Short-term debt often carries a larger interest rate and will make your company appear risker to investors and creditors.
Preview of Answers
1) Which one of the following is a product cost?
A. Indirect labor
B. Sales person’s salaries
C. Office salaries
D. Advertising costs
Explanation: Indirect labor is often required to bring a product to necessary sales standards.
2) Lucy starts her own psychiatric practice, but her expenditures to open the practice exceed her income. Lucy is a __________.
A. borrower who demands money from the financial system
B. borrower who supplies money to the financial system
C. saver who supplies money to the financial system
D. saver who demands money from the financial system
3) Of the following companies, which one would not likely employ the specific identification method for inventory costing?
A. Music store specializing in organ sales
B. Antique shop
C. Farm implement dealership
D. Hardware store
4) Which one of the following items is not generally used in preparing a statement of cash flows?
A. Adjusted trial balance
B. Comparative balance sheets
C. Additional information
D. Current income statement
5) The conceptual framework developed by the Financial Accounting Standards Board __________.
A. was approved by a vote of all accountants
B. is viewed as providing a constitution for setting accounting standards for financial reporting
C. are rules that all accountants must follow
D. is legally binding on all accountants
6) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A. Static reporting
B. Exception reporting
C. Responsibility reporting
D. Master budgeting analysis
7) The cost principle requires that when assets are acquired, they be recorded at __________.
A. appraisal value
B. selling price
C. exchange price paid
D. list price
8) If a company reports a net loss, it __________.
A. will not be able to make capital expenditures
B. will not be able to get a loan
C. may still have a net increase in cash
D. will not be able to pay cash dividends
9) The major reporting standard for management accounts is __________.
A. generally accepted accounting principles
B. relevance to decisions
C. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management
D. the Sarbanes-Oxley Act of 2002
10) The primary purpose of the statement of cash flows is to __________.
A. facilitate banking relationships
B. provide information about the cash receipts and cash payments during a period
C. provide information about the investing and financing activities during a period
D. prove that revenues exceed expenses if there is a net income