AAEC 3980 - Final Exam Review

Costs that have been incurred in the past and will not change regardless of what decisions are made are: a. opportunity costs b. controllable costs c. included in economic decision-making d. sunk cost e. fixed cost

d. sunk cost

The five barriers to consumer satisfaction include: a. ownership separation b. time separation c. value separation d. information separation e. all of the above

e. all of the above

The fundamental principle associated with decision making include: a. make decision making easier b. improve the quality of those decisions c. reduces the time to make good decisions d. improves the frequency of good decisions e. all of the above

e. all of the above

The interesting points of the production function include: a. maximum output b. maximum efficiency c. average product = marginal product, and peak of total product = marginal product at zero d. maximum contribution e. all of the above

e. all of the above

There are nine marketing functions; which of the following is not one of them? a.market information b. risk c. grades and standards d. financing e. promotion

e. promotion

Of the following, which is not an acceptable forecasting procedure? a. moving averages b. future market c. seasonal or cyclical patterns d. graphical analysis and extrapolation e. roll of the dice or flipping a coin

e. roll of the dice or flipping a coin

If the seasonal price index number for August is 93.4, what percentage of the average annual price is the price in August during a normal year? a. 100% b. 200% c. 110.7% d. 109.2% e. 93.4%

e. 93.4%

To be considered a current liability, an item must: a. be payable in cash within the next accounting period b. be received in cash within the next accounting period c. include all items to be incurred in the coming accounting period d. less than the corresponding entry for current assets e. be an owner's claim against the current asset

a. be payable in cash within the next accounting period

Seasonal patterns: a. can be used to predict quantities and prices in a normal year b. reflect biological lags of four years for hogs and nine years for cattle c. largely reflect interest rate fluctuations d. are long term in nature e. none of the above

a. can be used to predict quantities and prices in a normal year

The entries for recording the start of a business include: a. debit cash, credit owner equity b. debit cash, credit revenue c. debit owner equity, credit expense d. debit cash, credit liability e. none of the above

a. debit cash, credit owner equity

The decision maker should be high enough in the organization to: a. insure all affected activities and objectives are considered b. make sure the decision will stick c. avoid any problems if the decision is wrong d. all of the above e. none of the above

a. insure all affected activities and

Controls should: a. measure progress toward goals and alert management to serious deviations b. always be the dominant business task of the CEO or president c. permit responsibility to be clearly established int eh event of a disaster d. be unnecessary if the correct standard, metric, or benchmark is clearly stated e. correctly determine the cause of the deviation from the plans

a. measure progress toward goals and alert management to serious deviations

If the farmers' share of the retail price of beef was 48.6% in July, 2014, a. on average, the farmer receives 48.6% of the retail selling price back to the farm b. the farmers' / ranchers' share of the retail price is 48.6 cents/Ib. c. the farm to wholesale price spread was greater than the wholesale to retail price spread d. since the average retail price per pound for all pork cuts was $2.58, the cattleman received $1.25/Ib. for the beef e. both a and d

a. on average, the farmer receives 48.6% of the retail selling price back to the farm

A shift in demand cannot be caused by a change in: a. own price b. season of the year c. tastes and preferences d. price of substitutes or competitor's price e. population

a. own price

Examples of current assets would include all of the following except: a. plant, property and equipment b. cash c. inventory d. marketable securities e. account receivable

a. plant, property and equipment

Which of the following statements is also incorrect? a. the point of maximum efficiency is the same as maximum marginal product b. the point of maximum efficiency refers to the maximum efficiency of input use or average product c. the point of maximum efficiency defines the lower end of the profit-maximizing production area because it marks the start of the stage where the contribution of additional units of input begins to lower the efficiency of production d. the amount of input used at the point of maximum efficiency is the minimum needed to maximize profits e. each additional unit of input used up to the point of maximum efficiency brings greater efficiency than the last unit of input, and after the point of maximum efficiency, interest in further production increases begin to decline

a. the point of maximum efficiency is the same as maximum marginal product

Cycles: a. are the same as trends because they last longer than a year b. are repeating patterns that last more than a year c. last two or more years for cattle and nine to twelve years for hogs d. reveal that the best time to expand production of a commodity is at the top of the price cycle e. none of the above

b. are repeating patterns that last more than a year

Of the following statements, which is false? a. fixed costs arise from the passage of time and remain the same regardless of the level of production b. fixed costs are fixed per unit and fixed in total c. variable costs are fixed per unit and vary in total with the level of production d. subtracting total variable costs from total revenue determines total contribution e. dividing cost by (1 - desired contribution margin) determines the desired selling price

b. fixed costs are fixed per unit and fixed in total

The technique of comparing added costs to added returns to find the most profitable production levels is called: a. equi-marginal allocation principle b. incremental analysis c. profit maximization d. breakeven analysis e. partial budgeting

b. incremental anaylsis

The relationship between price and total revenue when the elasticity of demand inelastic is: a. price increases, total revenue decreases b. price decreases, total revenue decreases c. price decreases, total revenue is unchanged d. price decreases, total revenue increases e. none of the above

b. price decreases, total revenue decreases

Manufacturing, trade and retail sales are examples of: a. leading indicators b. roughly coincident indicators c. lagging indicators d. irrelevant data for forecasting e. none of the above

b. roughly coincident indicators

Marketing provides four utilities; which is not one of them? a. form b. satisfaction c. time d. place e. possession

b. satisfaction

Law of supply reflects: a. a direct relationship between price and quantity b. sellers/producers/growers willingness to provide more products for sale in the market as prices increase c. a supply curve that graphically is continued upward sloping to the right throughout d. the interpretation of the data in a supply schedule e. all of the above

b. sellers/producers/growers willingness to provide more products for sale in the market as prices increase

Agribusiness managers face big decisions when they undertake production, except deciding: a. what to produce b. who should produce c. how much to produce d. all of the above e. none of the above

b. who should produce

Gross income is defined to be: a. net income less income taxes b. overhead plus cost of goods sold c. depreciation plus bad debt expense d. revenue from sales less cost of goods sold e. other income less other expenses

d. revenue from sales less cost of goods sold

Given the following demand function, Q = f(P, Ps, Pc, I, Pop, T, S), where Q = quantity, P = own price, Ps = price of substitutes, Pc = price of compliments, I = income, Pop = population, T = tastes and preferences, S = seasonality, you would do the following in order to eliminate the effects of population on quantity demanded: a. remove Pop from the function and divide all the remaining variables by Pop b. remove Pop from the function and divide all the remaining variables except P by Pop c. Remove Pop from the function and divide Q and I by Pop d. remove Pop, T and S from the function and divide all remaining variables by pop e. none of the above

c. Remove Pop from the function and divide Q and I by Pop

What is the demand? a. a curve that is upward sloping to the right b. a direct relation between price and quantity c. a schedule of how much consumers are willing able to buy at various prices d. the opposite of supply e. a measure of market performance

c. a schedule of how much consumers are willing able to buy at various prices

Costs that cease because of a decision are: a. uncontrollable costs b. implicit costs c. avoidable costs d. incremental costs e. both c and d

c. avoidable costs

There are several ways to organize, each offering advantages and disadvantages. Which of the following is not one of the prescribed ways to organize? a. by difference between line and staff activities b. by business function c. by competitive advantage d. by geographical area e. by product

c. by competitive advantage

Of the characteristics that follow, which one is not one of the uniqueness factors for agribusiness? a. perishable products b. biological markets c. changing consumer tastes and preferences d. agricultural/technical knowledge e. seasonality

c. changing consumer tastes and preferences

The shape of the production function illustrates the principle of: a. diminishing marginal product b. diminishing marginal utility c. diminishing marginal returns d. diminishing physical productivity e. none of the above

c. diminishing marginal returns

consumers consume a variety of goods because of the economic principle of: a. diminishing utopian principle b. utility maximization c. diminishing marginal utility d. inverse law of demand e. ethics

c. diminishing marginal utility

Business management improves _________ of the agribusiness by finding profitable ways to apply new technology a. technical efficiency b. comparative advantage c. economic efficiency d. innovative integrity e. effectiveness

c. economic efficiency

Which of the following statements is inappropriate for using extrapolation as a forecasting tool? a. extrapolation is forecasting by using the idea that whatever happened in the past will happen again in the future b. extrapolation is ok as a 'first-cut' forecasting procedure in the short term c. extrapolation is better than graphical analysis for forecasting d. extrapolation is as good as any forecasting tool if the forecaster knows nothing about the variable e. extrapolation is the simplest of the forecasting procedures

c. extrapolation is better than graphical analysis for forecasting

The return that is given up by not selecting the highest-valued alternative among several projects is a(n): a. explicit cost b. implicit cost c. opportunity cost d. controllable cost e. variable cost

c. opportunity cost

The best forecasts are those that: a. show the 'big picture' b. cost the most c. relate the impact of macroeconomic variables and firm demand to changes in a firm's sales and costs d. use the most sophisticated methods/models e. none of the above

c. relate the impact of macroeconomic variables and firm demand to changes in a firm's sales and costs

If good "A" is a normal good, a flat trend in per capita consumption over time could be due to: a. rising per capita income b. a change in tases and preferences c. relative prices d. b and c but not a e. a, b, and c

c. relative prices

A PESTEL analysis does not include the following industry factor: a. political b. economic c. scientific d. environmental e. legal

c. scientific

Costs of goods sold represents: a. direct costs of all overhead or fixed assets used in the accounting period b. the implicit cost of inventory for the period c. the direct cost of purchasing and manufacturing the good that were sold during the accounting period d. the cost of all the materials and labor purchased during the period e. none of the above

c. the direct cost of purchasing and manufacturing the good that were sold during the accounting period

The purpose for computing a moving average for a price series is: a. to eliminate the effects of population from the data b. to reduce the impact of short-run fluctuations by plotting every single data point c. to smooth out the data and make it easier to identify trends d. to observe the effective demand e. to eliminate reliance on historical data

c. to smooth out the data and make it easier to identify trends

An example of a leading indicator in agribusiness: a. gross domestic product b. unemployment rate c. value of production d. stock prices, 500 common stock e. all of the above

d. stock prices, 500 common stock

A lagging economic indicator: a. normally changes direction 3-6 months after the general economy b. reflects the strength of the change c. is the unemployment rate among those unemployed more than 15 weeks d. all of the above e. is of no good for forecasting future economic variables

d. all of the above

The prerequisites to an efficient economic system include: a. a free market economy b. prices reflecting the full value of resources c. high degrees of interaction between consumers and producers d. all of the above e. none of the above

d. all of the above

The strategic plan includes the following analyses: a. SWOT b. PESTEL c. Five Forces d. All of the above e. none of the above

d. all of the above

The total value product curve can be described as: a. the mirror image of the total product curve b. applying prices to the horizontal and vertical axis of the production function c. identifying the profit maximizing area of production utilizing economic value rather than productivity measures d. all of the above e. none of the above

d. all of the above

If the calculated cross-price elasticity of pis ala mode (ice cream on pie) is -0.2, then: a. the cross price elasticity is inelastic b. ice cream is a complement good to pie c. for each 1% increase in P of ice cream, sales of pie decrease 0.2% d. all of the above are correct e. can't tell as insufficient information

d. all of the above are correct

Of the following statements, which is invalid? a. a limited liability company (LLC) is a hybrid of a corporation and a partnership, giving its owners the advantages of each legal structure b. the owners of an LLC are called members c. an LLC has the option of being taxed as either a partnership or a corporation d. an LLC, to be legal, must have, at a minimum, ten participants e. the management team is hired from outside the business, while the board of directors is elected from within the ranks of the owners

d. an LLC, to be legal, must have, at a minimum, ten participants

The four functions of management do not include: a. planning b. organizing c. controlling d. analyzing e. directing

d. analyzing

Which of the following statements is incorrect? a. the point of maximum contribution is the inflection point on the total product curve when the slope of the output line reaches its maximum and shifts to increasing at a decreasing rate b. at levels of inout beyond the point of maximum contribution, all additional units of input bring progressively smaller contributions (lower marginal product) to output, which eventually becomes zero at maximum output c. marginal product is at its maximum at the point of maximum contribution d. average product is great than marginal product at the level of input associated with maximum contribution e. the point of maximum contribution is annotated on the total product curve.

d. average product is great than marginal product at the level of input associated with maximum contribution

Of the following statements, which is false? a. the three components of breakeven analysis are selling price, costs, and output b. the breakeven is calculated from a profit equation when profit equals zero c. breakeven can be calculates as a quantity point and/or in dollars d. breakeven is equivalent to profit optimization e. breakeven analysis can be done graphically, using formulas, or with the C-V-P contribution format

d. breakeven is equivalent to profit optimization

A vertical analysis is used in financial statement analysis to: a. measure percentage changes year to year in the balance sheet and income statement accounts b. measure index value changes year to year in the balance sheet and income statement accounts c. measure dollar changes year to year in the balance sheet and income statement accounts d. measure an account's proportion of the net sales on the income statement or of the total assets on the balance sheet e. none of the above

d. measure an account's proportion of the net sales on the income statement or of the total assets on the balance sheet

Which of the following is an account category never to be found on the income statement? a. gross sales b. discounts, allowances, returns and sales taxes c. costs of good sold d. net worth e. net loss

d. net worth

Determinants of supply that are also supply shifters do not include: a. change in technology b. change in price of inputs c. number of suppliers d. price of the product supplied e. weather

d. price of the product supplied

Disadvantages of a sole proprietorship do not include: a. all losses are the exclusive responsibility of the owner b. the owner is responsible for acquiring all the capital the firm needs to operate c. the proprietor can hire family members of the family member is paid a reasonable wage for the service rendered d. the ownership of the proprietorship can be transferred to a beneficiary upon the death of the owner e. profits are taxed at individual personal income tax rates, which may be higher than the corporate tax rate

d. the ownership of the proprietorship can be transferred to a beneficiary upon the death of the owner

The horizontal analysis, as well as a trend analysis, can evaluate: a. the percentage changes in account values from one year to a later year for all of the formal financial statements b. the percentage changes in account values from one year to a later year for the financial statements using the accrual accounting procedure c. the percentage changes in account values from one year to a later year for the cash flow statement d. the percentage changes in account values from one year to a later year for the income statement and the balance sheet e. none of the above

d. the percentage changes in account values from one year to a later year for the income statement and the balance sheet

In a seasonal index, each month is shown as: a. a cross-sectional view of the year's price b. a relative value of the average value c. an extrapolation of the year's average price d. the percentage of the year's average e. none of the above

d. the percentage of the year's average

Of the following statements, which is false? a. the slope of the total product curve is zero at the point of maximum output b. the point of maximum output defines the upper end of the profit-maximizing production area c. the amount of input used at the point of maximum needed to maximize profits d. the point of maximum output is also the point of maximum economic efficiency e. the use of additional units of input beyond the point of maximum output causes output to fall, adding to costs and lowering output and profits.

d. the point of maximum output is also the point of maximum economic efficiency

The managers of autonomous profit centers should be given: a. only broad guidelines on hiring and firing b. limited latitude on hiring c. broad latitude on what products to make and sell d. the power and responsibility to achieve the desired goals, and to be judged strictly on their bottom line e. all of the above

d. the power and responsibility to achieve the desired goals, and to be judged strictly on their bottom line

If the retail to consumer price spread for eggs in cents per dozen during July 2014 was 51.3 cents, a. the consumer was paying %.13/dozen for eggs in the grocery store. b. the retail grocer paid the egg wholesaler 51.3 cents/dozen to get the eggs into the grocery store c. the egg grader/shipper paid the farm source of the eggs 51.3 cents/dozen d. the retail grocer added 51.3 cents / dozen to the price he/she paid to arrive at the selling price paid by the consumer e. none of the above

d. the retail grocer added 51.3 cents / dozen to the price he/she paid to arrive at the selling price paid by the consumer

Quartile measurements for financial ratios indicate: a. the average calculated value for the financial ratio in question b. the number of financial statements for the firms sorted by net sales c. a ranking from best to worst of the financial ratios for an industry d. the three calculated values that represent 25% increments of the financial statements evaluated e. none of the above

d. the three calculated values that represent 25% increments of the financial statements evaluated

Seven factors affect the demand for a product; which of the following foes not affect demand? a. own price b. price of complements c. income d. weather e. tastes and preferences

d. weather

Which of the following general headings cannot be found on a balance sheet? a. assets b. liabilities c. owner equity d. withdrawals e. none of the above

d. withdrawals

The principles of organizational design include: a. keep the organizational structure simple b. give critical tasks prominence and allow them to function without restriction c. keep support staff to a minimum d. keep working units small e. All of the above are among the principles of organizational design

e. All of the above are among the principles of organizational design

For a forecast to be of value, the user must: a. update the forecast b. use alternative outcomes c. understand the assumptions behind the forecast d. make good 'guess-timates' e. a, b, and c

e. a, b, and c

If good 'B' is an inferior good, a steady decrease in per capita consumption over time could be due to: a. a change in tastes and preferences b. rising per capita income c. relative prices d. a and c, but not b e. a, b, and c

e. a, b, and c

The difference between a vision statement and a mission statement is: a. the vision statement states what the firm aspires to be b. the mission statement defines the business purpose c. the vision statement explains how the business and all its employees are to conduct themselves d. only a and b are correct e. a, b, and c are all correct describing differences between the vision and mission statements

e. a, b, and c are all correct describing differences between the vision and mission statements

A real increase in price could signal: a. an increase in demand b. a decrease in supply c. a combination of a and b d. a or b, but not c e. a, b, or c

e. a, b, or c

A number of criteria for selecting the proper legal structure exist, including: a. resource acquisition b. continuity of existence c. liability of the owners d. participation in management e. all of the above

e. all of the above

Among the strategic objectives of an agribusiness might be the: a. return on invested capital b. efficient and effective use of firm's resources c. sustainable competitive advantage d. implementation and execution of a carefully crafted strategic plan e. all of the above

e. all of the above

Decisions reserved for top management include: a. those that set corporate purpose and mission b. determining promotion of line/staff personnel c. determining performance standards or metics d. set company policy, goals and objectives e. all of the above

e. all of the above

Elasticity is: a. %{delta}Q / 1%{delta} in P or I b. %{delta}Q / %{delta}P c. the responsiveness of quantity demanded to changes in prices and income d. either elastic, inelastic or unitary e. all of the above

e. all of the above

Financial records are essential because they help a manager determine: a. the firm's financial condition b. the firm's progress toward goals set in planning c. if the firm made a profit d. if the firm is solvent and has liquidity e. all of the above

e. all of the above

General characteristics of most partnerships include: a. assets are jointly owned b. profits and losses are shared c. each person involved participates in management decisions d. the parties operate under the firm's name e. all of the above

e. all of the above

In using forecasts, do: a. understand the assumptions behind the forecast b. update the forecasts c. use alternative outcomes d. investigate the cause for a forecast failing to predict the actual situation e. all of the above

e. all of the above

Managerial decisions that may drastically alter the implications of preparing the financial statements include: a. choice of depreciation schedule for assets b. managerial philosophy on taxes c. handling of inventory valuations d. preparing to sell the business e. all of the above

e. all of the above

Reasons not to hold inventory include: a. high maintenance costs b. high protection costs c. depreciation and obsolescence d. taxes on value of inventories e. all of the above

e. all of the above

Reasons to hold inventory include: a. lower costs associated with the number of orders placed and transportation b. match supply and demand c. stockout prevention d. take advantage of quantity discounts e. all of the above

e. all of the above

Supply flexibilities or elasticities are: a. marketer's response in price change offered to seller/producer in response to quantity changes offered by producers b. %{delta}P / %{delta}Q c. approximately the reciprocal to demand elasticity d. relevant in the 'buy-local' movement e. all of the above

e. all of the above

The advantages of decentralized management include: a. provided a training ground for younger managers b. frees top management from day-to-day chores c. keeps decisions and decision-making close together d. puts managers in charge of their own tasks and responsibilities e. all of the above

e. all of the above

The basic inventory management model, although seemingly less important today because of efficiency in the supply chain, is still relevant because: a. a manager need to determine the economic order quantity and the reorder point b. determining the economic order quantity necessitates an understanding of total costs, ordering costs, and carrying costs of inventory at various levels of quantity requested per order c. the goal of inventory management is to minimize the total costs of ordering costs plus carrying costs d. the economic order quantity is the number of items to buy in each order that will minimize total cost while the reorder point identifies when to reorder to minimize the changes for stockouts e. all of the above

e. all of the above

The business plan is designed to: a. give the firm its "competitive edge' b. help employees to do a better job c. help a manager better understand what to do d. tell others what the firm is to do e. all of the above

e. all of the above

The corporate legal structure offers advantages not found in other legal structures, including: a. limited personal liability and income tax minimization b. continuity of management c. specialization of management decision making d. estate planning e. all of the above

e. all of the above

The cost-volume-profit analysis (also known as the contribution margin analysis) can be used to evaluate the following, by filling in the knowns and solving for the unknowns: a. operating income b. changed in fixed costs and variable costs c. breakeven sales and quantity d. selling price per unit e. all of the above

e. all of the above

The profit maximizing production area can be recognized: a. on the production function diagram (total product, marginal product, average product) b. on the value of production function diagram (total value product, marginal value product, average value product, marginal factor cost) c. on the total cost curve diagram (fixed cost, total variable costs, totals costs) d. on the average cost curve diagram (marginal cost, average variable cost, average costs, average total cost, average fixed cost, marginal revenue) e. all of the above

e. all of the above

Advantages of a proprietorship include: a. all decisions, operations, policies, and goals rest with that one person - flexibility in management b. the business owner is the boss c. the proprietor gets all the rewards of good management decision-making directly d. the sole or individual proprietor assumes all the risk and personally derives all the profits e. all of the above are advantages

e. all of the above are advantages

Building a proper organizational structure for an agribusiness involves: a. developing the best ways to channel work through the organization b. resolving differences in corporate goals c. deciding where business decisions should be made d. deciding who reports to whom e. all of the above are among the principles of organizational design

e. all of the above are among the principles of organizational design

Budgeting has several beneficial functions, including: a. providing a way to measure business performance b. keeping managers focused on the financial implications of their business decisions c. helping managers communicate expectations and quickly spot deviations d. measuring performance against the goals the agribusiness set for itself and against that of tis competition e. all of the above are benefits of budgeting

e. all of the above are benefits of budgeting

If the calculated income elasticity of a brand of ice cream is +2.0, then: a. the income elasticity is elastic b. ice cream is a normal good c. for every 1% increase in income, ice cream sales will increase be 2% d. ice cream is a luxury good e. all of the above are correct

e. all of the above are correct

There are also limitations of budgets, including: a. budgets are estimates, not sure things b. the execution of a budget is not automatic c. budgets cannot take the place of good management d. good budgeting requires time and patience e. all of the above are limitations of budgets

e. all of the above are limitations of budgets

A written partnership needs to address: a. how much control does each partner have in business decisions b. how much control does each partner have other real and personal property used by the partnership c. how are profits and losses distributed among the partners d. how does the partnership plan to keep records e. all of the above should be in the written agreement

e. all of the above should be in the written agreement

If the calculated price elasticity of ice cream is -2, then: a. the demand for the product is inelastic b. the demand for the product is elastic c. the product is a normal good because of the inverse relation between price and quantity d. for each 1% increase in P, sales decrease 2% e. all of the above, except a.

e. all of the above, except a.

Contribution is: a. the value of the residual after variable cost per unit is deducted from the selling price per unit b. the value contributed toward covering fixed costs and profits or operating income c. measured either as per unit, margin percentage, or total d. the amount donated by employees toward the boss's retirement fund e. all of the above, except d

e. all of the above, except d

Common size or comparative statement analysis may involve: a. risk management association's Annual Statement Studies b. sorting firm's financial statements by total asset values into various dollar value (size) categories c. sorting firm's financial statements by net sales values into various dollar value (size) categories d. evaluating one firm against the average computations for other firms in same industry (same NAICS code) having same relative size of sales or assets) e. all of the above

e. all of the above.

The elasticity effect on total revenue when the elasticity of demand is elastic is: a. price rises, total revenue declines b. price rises, total revenue rises c. price rises, total revenue is unchanged d. price declines, total revenue increases e. both a. and d.

e. both a. and d.

Of the following competitive forces, which one is not among Michael Porter's Five Forces Model? a. rivalry among existing competitors b. threat of new entrants c. increasing bargaining power of suppliers and buyers d. threat of substitute products e. changes in technology

e. changes in technology

Trends: a. are the same as cycles because they last longer than a year b. last two years for hogs and nine to twelve years for cattle c. are repeating patterns that last less than a year for agricultural commodities d. reveal the best time to expand production of a commodity is at the peak of its price patten e. none of the above

e. none of the above

Which of the following is not recognized as a formal financial statement? a. statements of change in owner equity (also known as reconciliation of net worth) b. balance sheet (also known as statement of financial condition) c. income statement (also known as statement of financial performance, and/or P&L statement) d. cash flow statement (also known as sources and uses of cash) e. none of the above

e. none of the above

Which of the following would not be part of the business plan? a. a good pricing policy b. a multiple-year financial plan c. evidence of a thorough knowledge of customers and products/services d. discussion of firm's purpose and objectives e. none of the above

e. none of the above

Which of the following of budgets and budgeting is incorrect? a. a budget is a blueprint for action for a specific period that is based on sales, costs and productivity estimates developed in the marketing plan b. a budget id the financial plan of management's expectations fro the business int he future c. a budget is a model of what management realistically thinks the future holds for the firm d. a budget represents a realistic assessment of what each part of the business can accomplish during the coming period e. none of the above is an incorrect statement

e. none of the above is an incorrect statement

Which of the following is not in the preparation of the statement of change in owner equity? a. beginning balance, owner equity b. net income c. withdrawals d. ending balance, owner equity e. none of the above, as all are included

e. none of the above, as all are included

With respect to decision making, which of the following statements is least correct? a. In a centralized decision-making system, all the decision-making authority is held by a few top executives who become involved in every decision, regardless of its importance. b. In a decentralized decision-making system, decision-making authority for routine matters is delegated to lower levels of management, while top management only makes decisions that affect strategic matters c. Decisions that are best made at the lowest levels of the organization are those that affect the firm for a short period, involve small amounts of money, and do not affect the business's purpose and objectives d. decisions that are best made at the highest level of the organization are those that affect the firm for a long period of time, involve large amounts of money, and dramatically affect the business's purpose and objectives e. the decision maker should be neither high enough in the organization so that the major impact of the decision falls within units under his or her control, nor low enough to have first hand knowledge of the situation.

e. the decision maker should be neither high enough in the organization so that the major impact of the decision falls within units under his or her control, nor low enough to have first hand knowledge of the situation.

Which of the following statements is incorrect regarding the types of budgets? a. the operating budget summarizes the expected sales, production activities, and related costs for the budgetary period b. cash flow budgets summarize the amount and timing of cash that is expected to flow in and out of the business during the budgetary period c. capital expenditure budgets show how to the money budgeted for capital expenditures is to be allocated among competing projects d. the operating budget, the cash flow budget, and the capital expenditure budget for capital expenditure budget are all tied to the marketing plan through sales estimates e. the operating budget is another term for a financial forecast as both indicate what is likely to happen under a specific set of conditions

e. the operating budget is another term for a financial forecast as both indicate what is likely to happen under a specific set of conditions

Which of the following statements is incorrect? a. sometimes the best decision is to accept a price for a product that does not permit the firm to make a profit b. When a contribution per unit is positive, even if it is not enough to pay all the fixed costs, it is better to accept the job because at least part of the total fixed costs are covered c. the pricing decision works only in the short term d. over the long term, the firm must cover all its costs to continue to operate e. the shut down point is when contribution per unit is less than variable cost per unit

e. the shut down point is when contribution per unit is less than variable cost per unit

The five factors of economic forecasting do not include: a. accuracy desired b. time permitted and time period projected c. complexity of situation d. amount of resources available e. weather

e. weather