Question 1

Assuming other factors are held constant, the dollar value of the firm’s overall market share will

increase when

Options :

A : Customer penetration decreases

B : The average purchases from the average firm increases

C : Total purchases from seller of the same products increases

D : Price selectively increases

Answer: D

Question 2

Benefits of computer-integrated manufacturing (CIM) include all of the following except

Options :

A : Faster response to market changes.

B : Lower production costs.

C : Greater oversight by upper management.

D : Improved product quality.

Answer: C

Question 3

Gleason Co. has two products, a frozen dessert and ready4o-bake breakfast rolls, ready for

introduction. However, plant capacity is limited, and only one product can be introduced at present.

Therefore, Gleason has conducted a market study, at a cost of $26000, to determine which product

will be more profitable. The results of the study follow.

The costs associated with the two products have been estimated by Gleason’s cost accounting

department and are shown as follows:

*Gleason treats production tooling as a current operating expense rather than capitalizing it as a

fixed asset.

Applying a deterministic approach, Gleason’s revenue from sales of frozen desserts would be

Options :

A : $549,000

B : $540,000

C : $216,000

D : Some amount other than those given.

Answer: B

Question 4

Which of the following terms is not connected with the employment of just-intime( JIT)manufacturing?

Options :

A : Cells

B : Kanban

C : Lean production

D : Safety stock

Answer: D

Question 5

Debentures are

Options :

A : Income bonds that require interest payments only when earnings permit.

B : Subordinated debt and rank behind convertible bonds.

C : Bonds secured by the full faith and credit of the issuing firm

D : A form of lease financing similar to equipment trust certificates

Answer: C

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