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Q226. Market-skimming pricing strategies could be appropriate when:
A. No buyers want the product at a high price.
B. The costs of producing a small volume are low.
C. Competitors can easily enter the market.
D. The product is of poor quality.
Answer: B
Explanation:
Market-skimming pricing is used when a new product is introduced at the highest price possible given the benefits of the product. For market skimming to work, the product must appear to be worth its price, the costs of producing a small volume cannot be so high that they eliminate the advantage of charging more, and competitors cannot enter the market and undercut the price.
Q227. Quality cost indices are often used to measure and analyze the cost of maintaining a given level of quality. One example of a quality cost index, which uses a direct labor base, is computed as:
The following quality cost data were collected for May and June:
Based upon these cost data, the quality cost index:
A. Decreased four points from May to June.
B. Was unchanged from May to June.
C. Increased 10 points from May to June.
D. Decreased 10 points from May to June.
Answer: A
Explanation:
The index for May was 40 [(US $4,000 + $6,000 + $12,000 + $14,000) + $90,000], and the index for June was 36 [(US $5,000 + $5,000 + $15,000 + $11.000) + $100,000].
Answer:
Q228. Misstatements in a batch computer system caused by incorrect programs or data may not be detected immediately because:
A. Errors in some transactions may cause rejection of other transactions in the batch.
B. The identification of errors in input data typically is not part of the program.
C. There are time delays in processing transactions in a batch system. D The processing of transactions in a batch system is not uniform.
Answer: C
Explanation:
Tran actions in a batch computer system are grouped together, or batched, prior to processing.
Batches may be processed either daily, weekly, or even monthly. Thus, considerable time may elapse between the initiation of the transaction and the discovery of an error.
Q229. Because of the large number of factors that could affect the demand for its new product, interactions among these factors, and the probabilities associated with different values of these factors, the marketing department would like to develop a computerized model for projecting demand for this product. By using a random-number procedure to generate values for the different factors .it will be able to estimate the distribution of demand for this new product. This method of estimating the distribution of demand for the new product is called:
A. Monte Carlo simulation.
B. Linear programming.
C. Correlation analysis.
D. Differential analysis.
Answer: A
Explanation:
Simulations that use a random-number procedure to generate values for the inputs are Monte Carlo simulations.
Q230. If the bank uses the minimax regret criterion for selecting the location of the branch, it will select.
A. L1.
B. L2.
C. L3.
D. L4.
Answer: B
Explanation:
Under the minimax regret criterion, the decision maker selects the choice that minimizes the maximum regret (opportunity cost)the maximum regret for each location is determined from the opportunity loss matrix. The maximum regret for each location is the highest number in each column as indicated below.
The location with the minimum regret is L2. If demand is low, L2 has a payoff –2, whereas L1 has a payoff of 7. A bank plans to open a branch in one of five locations labeled L1, L2, L3, L4, L5). Demand for bank services may be high, medium, or low at each of these locations.
Profits for each location-demand combination are presented in the payoff matrix.
Q231. If the exchange rate has changed from 1 local currency unit LCU) to 5 foreign currency units
FCUs) to a rate of 1 LCU to 5.5 FCUs,
A. The LCU has appreciated by 10%.
B. The LCU has depreciated by 10%.
C. The FCU has appreciated by 20%.
D. The FCU has depreciated by 20%.
Answer: A
Explanation:
If the exchange rate changes from 1 LCU to 5 FCUs to 1 LCU to 5.5 FCUs, the LCU has appreciated by 10% [(5.5 - 5) 5].
Q232. Large organizations often have their own telecommunications networks for transmitting and receiving voice, data, and images. Very small organizations, however, are unlikely to be able to make the investment required for their own networks and are more likely to use:
A. Public switched lines.
B. Fast-packet switches.
C. Standard electronic mail systems.
D. A WAN.
Answer: A
Explanation:
Companies can use public switched lines phone lines) on a per-transmission basis. This option is the most cost-effective way for low-volume users to conduct telecommunications.
Q233. Total inventory ordering costs per year equal:
A. US $1,250
B. US $2,400
C. US $2,880
D. US $3,600
Answer: C
Explanation:
Total annual demand is 48,000 units 4,000 per month x 12). Hence, total annual ordering costs equal US $2,880 [$150 cost per order 48,000 units - 2,500 EOQ)].
Q234. Quality control programs employ many tools for problem definition and analysis. A scatter diagram is one of these tools. The objective of a scatter diagram is to:
A. Display a population of items for analysis.
B. Show frequency distribution in graphic form.
C. Divide a universe of data into homogeneous groups.
D. Show the vital trend and separate trivial items.
Answer: A
Explanation:
The objective of a scatter diagram is to demonstrate correlations. Each observation is represented by a dot on a graph corresponding to a particular value of X the independent variable) and Y the dependent variable).
Q235. In the output or "expenditures" approach to measuring a country's gross domestic product, which of the following calculations is used?
A. Consumption + Investment + Government purchases + Expenditures by foreigners.
B. Consumption + Investment + Government purchases - Expenditures by foreigners.
C. Consumption+ Investment - Government purchases - Expenditures by foreigners. D. Consumption + Investment - Government purchases - Expenditures by foreigners.
Answer: A
Explanation:
GDP can be calculated using an income approach or an expenditures approach because what is spent on a product or service is income to those who contributed resources to its production and marketing. Thus, the amount spent to purchase the GDP is identical with the income derived from its production and sale. Under the output or expenditures approach, GDP equals the sum of consumption expenditures by households, investment by business, government purchases of goods and services, and expenditures by foreigners net exports).
Q236. During the growth stage of a product's life cycle,
A. The quality of products is poor.
B. New product models and features are introduced.
C. There is little difference between competing products.
D. The quality of the products becomes more variable and products are less differentiated.
Answer: B
Explanation:
In the growth stage, sales and profits increase rapidly, cost per customer decreases, customers are early adopters, new competitors enter an expanding market, new product models and features are introduced, and promotion spending declines or remains stable. The firm enters new market segments and distribution channels and attempts to build brand loyalty and achieve the maximum share of the market. Thus, prices are set to penetrate the market, distribution channels are extended, and the mass market is targeted through advertising. The strategy is to advance by these means and by achieving economies of productive scale.
Q237. Governments most likely restrict trade in the long run to:
I. Help foster new industries.
II. Protect declining industries.
III. Increase tax revenues.
IV.
Foster national security.
A.
I only
B.
I and II only
C.
II and III only
D.
I, II, and IV only
Answer: B
Explanation:
Governmental impediments to global competition are generally imposed for the announced purpose of protecting local entities and jobs and developing new industries.
They also may have the effect of raising revenue in the short run. In the long run, tax and revenues will decline because of reduced trade. Examples of governmental impediments are tariffs; duties; quotas; domestic content rules; preferences for local entities regarding procurement, taxes. R&D, labor regulations, and other operating rules; and laws e.g., anti bribery or tax) enacted by a national government that impede national entities from competing globally. These impediments are most likely when industries are viewed as crucial.
Q238. To index a progressive tax system to inflation, the government must:
A. Adjust only tax deductions and exemptions.
B. Adjust only tax brackets.
C. Adjust deductions, exemptions, and tax brackets.
D. Ensure that nominal tax receipts grow more slowly than inflation.
Answer: C
Explanation:
If tax brackets are not adjusted for inflation, increases in nominal but not real income may push taxpayers into tax brackets with higher progressive) rates. Additionally, deductions and exemptions must be indexed so that the real incidence of taxation is not increased by inflation. Increases in nominal but not real income will result in higher real taxable income if deductions and exemptions have not been adjusted for inflation.
Q239. If a control total were to be computed on each of the following data items, which would best be identified as a hash total for a payroll computer application?
A. Hours worked.
B. Total debits and total credits.
C. Net pay
D. Department numbers.
Answer: D
Explanation: The three types of control totals are record counts, financial totals, and hash totals Record counts establish the number of source documents and reconcile it to the number of output records. Financial totals compute dollar totals from source documents e.g.. the total dollar amount of invoices processes) and reconcile them with the output records. Hash totals add numbers on input documents that are not normally added e.g., department numbers), resulting in a total that is
"meaningless" for any purpose other than this control. Batchelder Company has the following invoices in a batch:
Q240. A company's product has an expected 4-year life cycle from research, development, and design through its withdrawal from the market. Budgeted costs are:
The company plans to produce 200,000 units and price the product at 125°!a of the wholelife unit cost. Thus, the budgeted unit selling price is:
A. US $15
B. US $31
C. US $36
D. US $45
Answer: D
Explanation:
Whole-life costs include after-purchase costs operating, support, repair, and disposal) incurred by customers as well as life-cycle costs R&D, design, manufacturing, marketing, distribution, and research). Hence, the budgeted unit whole-life cost is US $36 [($2,000,000 + $3,000,000 + $1,200,000 + $1,000,000) - 200,000 units], and the budgeted unit selling price is US $45 $36 125CYo).