Business 3 PassMaster Questions - Becker CPA Review,...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Becker CPA Review, PassMaster Questions Lecture: Business 3 1 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. CPA PassMaster Questions–Business 3 Export Date: 10/30/08
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Becker CPA Review, PassMaster Questions Lecture: Business 3 2 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Factors Affecting Financial Modeling and Decision Making CPA-03274 Type1 M/C A-D Corr Ans: B PM#2 B 3-01 1. CPA-03274 ARE R99 #25 Page 7 Which tool would most likely be used to determine the best course of action under conditions of uncertainty? a. Cost-volume-profit analysis. b. Expected value (EV). c. Program evaluation and review technique (PERT). d. Scattergraph method. CPA-03274 Explanation Choice "b" is correct. Probability and expected value formulate quantitative models to address the issue of appropriate course of action in an environment of uncertainty. The expected value is a weighted average of all values and variables. The course of action with the highest expected monetary value should be selected. Choice "a" is incorrect. Cost-volume profit analysis is a method used to evaluate operating decisions. Choice "c" is incorrect. PERT is a technique used in project management that focuses on the time required to complete each step in a project. It allows a project manager to monitor a project’s progress and identify potential bottlenecks or delays that will postpone the completion date. Choice "d" is incorrect. The scattergraph method is used in statistical analysis toplot relationships between variables to determine a line function that best describes those relationships. CPA-03280 Type1 M/C A-D Corr Ans: A PM#3 B 3-01 2. CPA-03280 J96 - 1.17 Page 4 In situations when management must decide on accepting or rejecting one-time-only special orders, where there is sufficient idle capacity, which one of the following is not relevant to the decision? a. Absorption costs. b. Direct costs. c. Variable costs. d. Incremental costs. CPA-03280 Explanation Choice "a" is correct. Absorption costs are not relevant in situations when management must decide on accepting or rejecting one-time-only special orders, and where there is sufficient idle capacity. All of the following costs are relevant in such situations: b. Direct costs c. Variable costs d. Incremental costs CPA-03287 Type1 M/C A-D Corr Ans: C PM#5 B 3-01 3. CPA-03287 ARE May 95 #48 Page 7 Dough Distributors has decided to increase its daily muffin purchases by 100 boxes. A box of muffins costs $2 and sells for $3 through regular stores. Any boxes not sold through regular stores are sold through Dough's thrift store for $1. Dough assigns the following probabilities to selling additional boxes: Regular Store Sales Thrift Store Sales Probability 60 40 .6
Background image of page 2
Becker CPA Review, PassMaster Questions Lecture: Business 3 3 © 2009 DeVry/Becker Educational Development Corp. All rights reserved.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/25/2011 for the course ACCOUNTING AC555ON taught by Professor Abekele during the Spring '10 term at Keller Graduate School of Management.

Page1 / 115

Business 3 PassMaster Questions - Becker CPA Review,...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online