1. A duration driver is :
a. A simple count of the number of times an activity occurs.
b. An activity measures that is used for the life of an activity- based costing system.
c. An activity measures that is used for the life of company.
d. A measures of the amount of time required to perform an activity.

2. Spendlove corporation has provided the following data from its activity-based costing system

 
The company makes 1,100 units of product S78N a year, requiring a total of 12,00 machine hours, 131 orders, and 31 inspection-hour per year. The product’s direct material cost is $50,89 per units and its direct labor cost is $20.56 per unit. The product sells of $113.30 per unit.
According to the activity-based costing system, the product margin for product S78N is : (Round your intermediate calculation to 2 decimal place).
a. $117,430.05
b. $46,035.00
c. $18,492.05
d. $15,027.55
 
3.Matt Company used activity- based costing. The company has two product. A and B. the annual production and sales of product A is 9,000 units and of product B is  6,500 units. There are three activity cost pool with total activity as follow:

The activity based costing cost per unit of product Ais closest to:
a. $14.33
b. $4.54
c. $7.84
d. $3.94

4. The controller Ferrence Company estimates the amount of material handing  overhead cost that should be allocated to the company’s two product using the data that are given below:

The total material handing cost for the year is expected to be $17,148.70.
If the material handing cost is allocated on the basis of direct labor- hours, how much of the total material handing cost would e allocated to the wall mirrors?
a. $9,566
b. $14,727
c. $12,894
d. $7,917

1. Carla Contractor Company contracts to build a house for Lisa for $500,000. The house is completed on time and is in conformity with contract specifications except that Carla’s workers forgot to put in Kohler plumbing fixtures in the master bathroom and instead mistakenly put in another slightly less expensive and not as prestigious brand. Otherwise the house is fine and is in conformity with the contract, but now Lisa refuses to pay for the construction of the house, saying the performance was defective due to the mistaken fixtures. What is the likely legal result of this dispute?

 a. Lisa is discharged from any and all contract responsibility and does not have to pay anything and can successfully sue Carla for breach of contract.

 b. Lisa can sue and prevail since under the Uniform Commercial Code Carla’s performance was not perfect.

c. Lisa must pay Carla the agreed upon contract price minus an amount to correct the defect since the “substantial performance” doctrine of the common law prevails.

d. Lisa can sue for “pain and suffering” damages since she was stressed out by the “inferior” plumbing fixtures.

2. At one time, Office Depot merged with Staples, leaving Office Max as a very small remaining competitor. This merger was deemed to be illegal pursuant to the Clayton Act because:

a. The market was defined broadly to include all stores that sell office supplies.

b. The market was defined narrowly to include just office supply “super-stores.”

c. There was the probability of a substantial lessening of competition in the market.

d. B and C.

3. Donnie makes an offer to Marie to sell his used racing bicycle for $200. Marie responds by saying “I accept at $150.” Donnie refuses and says the price is firm. Marie then says “OK, I accept at the original price.” However, Donnie sells the bike to a third party; whereupon Marie sues Donnie for breach of contract. Who is likely to prevail?

a. Marie since she accepted Donnie’s offer at $200.

 b. Marie since her initial response was merely an “invitation to offer.”

c. Donnie since his original offer was terminated by Marie’s counteroffer.

d. Donnie since the court would void the entire contract since $200 for even a used racing bike does not seem like a fair price.

4. Francis owns a small motel in Sugarloaf Key. She notices by means of public advertising that her competitors in Big Pine Key and Ramrod Key have extended by two weeks their “winter season” and thus their winter season higher rates. Francis also notices the “no vacancy” signs at her competitors’ motels. So, Francis decides to extend the winter season at her motel too. Francis has engaged:

 a. Illegal horizontal price-fixing by means of an express agreement.

b. Illegal horizontal price-fixing by means of an implied agreement

 c. Legal action by means of the doctrine of Conscious Parallelism

d. Legal action since anti-trust law does not apply to small motels, only large ones and hotels.

1. Which of the following statements best represents what finance is about?              

a.     How political, social, and economic forces affect corporations

b.     Maximizing profits

c.     Creation and maintenance of economic wealth

d.     Reducing risk

2. The goal of the firm should be:                                     

a.     Maximization of profits.

b.     Maximization of shareholder wealth.

c.     Maximization of consumer satisfaction.

d.     Maximization of sales.

3. Consider the timing of the profits of the following certain investment projects:       

                               Profit

                          L             S

Year 1             $0          $3000

Year 2            $3000       $0

a.     Project S is preferred to Project L.

b.     Project L is preferred to Project S.

c.     Projects S and L are equally desirable.

d.     A goal of profit maximization would favor Project S only.

4. Which of the following best describes the goal of the firm?                

a.     The maximization of the total market value of the firm’s common stock

b.     Profit maximization

c.     Risk minimization

d.     None of the above

1. Eric wrote Donna a check for $50. Eric accidentally dated the check 3/1/07, even though it was actually 3/1/08 when he wrote the check. Eric thought that there was $75 in the account, but there was actually only $10 in the account. Which one of the following scenarios is most likely to occur? 

A. The bank will not honor the check because it’s stale. 

B. The bank will not honor the check because it’s postdated. 

C. The bank will honor the check, even though it will result in an overdraft. 

D. The bank will honor the check, even though a stop-payment order has been made. 

2. Erica writes a $100 check to Sam. Sam takes the check to his bank, endorses the check, and deposits it into his bank. This process is best described as 

A. transfer by assignment. 

B. taking for value. 

C. transfer by negotiation. 

D. transfer to a holder in due course. 

3. Sara wrote a check to Steven in the amount of $100 to be drawn from her account at Big Money Bank. When took the check to Big Money Bank to be cashed, Big Money refused to pay the check because Sara’s deposit wasn’t made in time to be credited to her account for that day and wouldn’t be available until the next day. Which of the following is true about this turn of events? 

A. Sara is liable to Steven for the $100. 

B. Sara is not liable to Steven for the $100. 

C. Big Money Bank is liable to Sara for the $100. 

D. Big Money Bank is liable to Steven for the $100. 

4. Joan noticed one day that her bank debit card was missing from her purse. Joan notified her bank immediately. When Joan received her statement the next month, the bank charged her $500 for withdrawals made after the debit card disappeared. Which one of the following laws do the charged violate? 

A. Federal Trade Commission Act of 1914 

B. Electronic Fund Transfer Act of 1978 

C. Banking Act of 1999 

D. Electronic Communications Privacy Act of 1986

1. Tom is a consumer with a lot of credit card debt who wants to get a clean start and get rid of all of his

debts. If he qualifies, the best chapter in bankruptcy for Tom is Chapter

A. 7.

B. 13.

C. 11.

D. 12.

2. Victor applies for life insurance. On the application, when asked if he had ever been diagnosed with

cancer, he falsely said no. Later Victor died, and the insurance company found out about the previous

diagnosis of cancer and refused to pay. What were the most likely grounds?

A. Failure to pay premiums

B. Estoppel

C. Misrepresentation

D. Concealment

3. Liza borrows money from First Finance Company for miscellaneous expenses. Liza and First Finance agree that Liza’s diamond ring shall serve as collateral for the loan. Two weeks later, Liza takes a loan from Second Finance Company listing the same diamond ring as collateral. Neither First Finance nor Second Finance takes any additional steps. Liza defaults on both loans. Second Finance demands possession of the diamond ring and Liza gives it to them. Which of the following statements regarding this set of facts is

true?

A. Both First Finance and Second Finance possess equal rights in the diamond ring and must equally divide any proceeds from the sale of the ring.

B. First Finance Company possesses the priority claim because it loaned the money to Liza before Second Finance.

C. Neither finance company possesses a valid security interest in the diamond ring, and neither possesses any remedy due to the failure to file a financing statement.

D. Second Finance Company possesses the priority claim because it perfected its security interest first.

4. What type of life insurance would most likely be used to cover the outstanding balance of a home

mortgage?

A. Universal life

End of exam

B. Straight life

C. Endowment

D. Decreasing term insurance