Question

1-A division manager who is evaluated based on the division's return on investment will ___________________ any proposal for which the rate of return is ___________________ than the division's current return on investment.

	a.	Accept; lower
	b.	Reject; higher
	c.	Reject; lower
	d.	None of the given options are correct.

2-

Processing patients at dental office:

Make appointment (office staff can schedule up to 100 appointments during an 8 hour shift)

Cleaning by dental hygienist (up to 50 patients per day can be seen by the 5 hygienists on staff)

Check-up completed by dentist (up to 30 patients per day can be seen by the dentist on staff)

Payment and checkout with receptionist (up to 60 patients per day).

Where is the bottleneck in this dental office?

	a.	Cleaning by dental hygienist
	b.	There is no bottleneck in this scenario.
	c.	Check-up completed by dentist
	d.	Payment and checkout with receptionist

3-

A manager in the Target corporation is responsible for purchasing merchandise for retail stores.  This manager in charge of a ___________________.

	a.	profit center
	b.	investment center
	c.	accounting center
	d.	cost center

4-

n order to be relevant in the decision making process, a cost must:

I. Be different among the alternatives.

II. Occur in the future.  

III. Stay the same.

	a.	I and II only.
	b.	II and III only.
	c.	II only.
	d.	I, II, and III.
	e.	I and III only.

5- Outdoor Recreation, Inc. makes wooden swing sets. Data concerning three of the company's most popular models appear below.

	Model A	Model B	Model C
Selling price per unit	$2,500	$3,000	$3,500
Variable cost per unit	$1,800	$2,100	$2,700
Gallons of paint per unit	1 gallon	2 gallons	2.5 gallons

A severe shortage of the specific paint required by the company to paint their swing sets has required the company to cut back its production. Which product would be the least profitable use of the limited supply of paint?  

	a.	Model A
	b.	All models are equally profitable
	c.	Model C
	d.	Model B

Answer 1

Answer 1: Reject; lower

Accept proposal where return is higher or reject proposal where return is lower

Answer 2: Check-up Completed by Dentist

Bottleneck means when demand high, which one is short. Here four activity appointment, Cleaning, checkup & Payment.

Supply is lowest of Check-up completed by Doctor among four.

Note: Assume that every patient need check up after the cleaning.

Answer 3: Cost Centre

Purchase manager is cost centre

Answer 4: II Only ;A cost must be occur in future is relevant.

Cost may be same but revenue will be differ.

Answer 5: Model C

Revenue per gallon of paint is least in Model C

	Model A	Model B	Model C
selling price	2500	3000	3500
variable cost	1800	2100	2700
Contribution per unit	700	900	800
Gallan paint per unit	1	2	2.5
Contribution per unit of paints	700	450	320