ETS Major Field Test (Practice Test) Bachelor's Degree in Business Questions and CorrectCorrect Answerwers Guaranteed Success ____ planning normally is performed by middle managers and typically has a one-year time frame
a) Strategic planning
b) Tactical planning
c) Operational planning
d) Contingency planning -Correct Answer b) Tactical planning
A company had sales of $920,000 and fixed costs were $160,000. What was the income from operations if the contribution margin ratio was 30 percent?
- $116,000
- $276,000
- $484,000
- $644,000 -Correct Answer a) $116,000
A company is considering producing a product for a new market. The fixed costs required for manufacturing and delivering the product is $50,000. Labor and material costs are estimated to be approximately $25.00 per product. If the product is sold for
$35.00 each, the firm's break-even volume would be:
- 50,000 units
- 5,000 units
- 2,500 units
- 500 units -Correct Answer b) 5,000 units
A company issued a $600,000, 12 percent, 90-day note payable to acquire an office building. What is the maturity value of the note?
- $72,000
- $600,000
- $618,000
- $672,000 -Correct Answer c) $618,000
A company's buying center encompasses:
- a representative from each department within an organization
- only a gatekeeper and a buyer 1 / 4
- everyone who is involved in any aspect of the buying process
- an exclusive top-notch buying department -Correct Answer c) everyone who is
involved in any aspect of the buying process
A department manager telephoned two managers in other departments to discuss a cost savings idea that would benefit their departments as well as her own. Which of the following most accurately defines the communication channel that the manager was using?
a) Upward
b) Lateral
c) Downward
d) Hierarchical -Correct Answer b) Lateral
A differentiation strategy enables a business to address the five competitive forces by
- lessening competitive rivalry by distinguishing itself
- having brand-loyal customers become more sensitive to prices
- increasing economies of scale
- serving a broader market segment -Correct Answer a) lessening competitive rivalry
by distinguishing itself
A firm that would like to know whether it has enough cash to meet its bills would be most likely to use which category of financial ratio?
a) Liquidity
b) Leverage
c) Efficiency
d) Profitability -Correct Answer a) Liquidity
A group that develops naturally as a result of employees' interaction within an organization is referred to as
- an informal group
- a formal group
- a work-team group
- a formation group -Correct Answer a) an informal group
A legal institution associated with an independent judiciary relying on case precedents is called
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- common law system
- civil law system
- theocratic law system
d) None of the above -Correct Answer a) common law system
A major competitor of XYZ, Inc. suddenly creates a new type of product that makes XYZ's products obsolete. This is an example of which type of force in the environment?
a) General environment
b) Task environment
c) Economic environment
d) Legal environment
e) Political environment -Correct Answer b) Task environment
A manager who chooses the wrong goals for the organization and makes poor use of
the organization's resources in pursuing these goals is said to have:
a) Low effectiveness/low efficiency
b) Low effectiveness/high efficiency
c) High effectiveness/low efficiency
d) High effectiveness/high efficiency
e) None of the above -Correct Answer a) Low effectiveness/low efficiency
A manufacturer estimates its factory overhead costs to be $30,000 and machine hours to be 4,000 for the year. If the actual hours worked on production total 3,800 and the actual factory overhead costs are $28,000, what is the amount of the over- or underapplied factory overhead?
- $500 overapplied
- $500 underapplied
- $2,000 overapplied
- $2,000 underapplied -Correct Answer a) $500 overapplied
A nuclear power plant uses electronic sensors linked to computers to continually monitor processes and make instant (real-time) adjustments that control the power
generation process. This is an example of a(n):
a) Transaction processing system
b) Decision support system
c) Enterprise collaboration system
d) Process control system -Correct Answer d) Process control system
A problem associated with equity theory is that:
- it focuses on providing incentives for the long run when most workers are mainly
concerned with incentives that apply to their current situation 3 / 4
- managers have a hard time applying it to real-world situations because of its abstract
nature
- worker motivation is based on perceptions of fairness, and the perceptions workers
have about their contributions are not always accurate
- it is concerned with the nature of the job itself rather than with what motivates the
workers who perform the job -Correct Answer c) worker motivation is based on perceptions of fairness, and the perceptions workers have about their contributions are not always accurate
A project consists of 150 jobs. The expected completion time for each job is given in days. The project has three critical paths with two jobs in common, J and K. In order to finish the project one day early, the completion time should be reduced one day for
- each of the 150 jobs
- each of the jobs on the three critical paths
- either Job J or Job K
- both Job J and Job K -Correct Answer c) either Job J or Job K
A project has a net present value of zero. Which one of the following best describes this project?
a) The project has a zero percent rate of return.
b) The project requires no initial cash investment.
c) The project has no cash flows.
d) The summation of all of the project's cash flows is zero.
e) The project's cash inflows equal its cash outflows in current dollar terms -Correct
Answer e) The project's cash inflows equal its cash outflows in current dollar terms
A sample of assistant professors on the business faculty at state supported institutions in Ohio revealed the mean income to be $32,000 for 9 months with a standard deviation of $3,000. Using Chebyshev's Theorem, what proportion of the faculty earns more than $26,000 but less than $38,000?
a) At least 50%
b) At least 25%
c) At least 75%
d) At least 100% -Correct Answer c) At least 75%
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