Question 1

Which marketing research instrument is based on follow-up questioning?

Options :

A : Articulate interviewing.

B : Customer prototyping.

C : Closed-end questions.

D : Laddering.

Answer: D

Question 2

BCD Corp. outsourced an order for shovel handles to RST Corp. because BCD could not fill the order.

By having RST produce the order, BCD was able to realize $10000 in sales profits that otherwise

would have been lost. The outsourcing cost added a cost of $1 .000, but BCD was ahead by $9000

when the order was completed. Which of the following statements is correct regarding BCD’s action?

Options :

A : The use of resource markets outside of BCD involves opportunity cost.

B : Accounting profit is total revenue minus explicit costs and implicit costs.

C : Implicit costs are not opportunity costs because they are internal costs.

D : Explicit costs are opportunity costs from purchasing shovel handles from a resource market.

Answer: A

Question 3

In equipment-replacement decisions, which one of the following does not affect the decision-making

process?

Options :

A : Current disposal price of the old equipment.

B : Operating costs of the old equipment.

C : Original fair market value of the old equipment.

D : Cost of the new equipment

Answer: C

Question 4

A company serves as a distributor of products by ordering finished products once a quarter and using

that inventory to accommodate the demand over the quarter. If it plans to ease its credit policy for

customers, the amount of products ordered for its inventory every quarter will be

Options :

A : Increased to accommodate higher sales levels.

B : Reduced to offset the increased cost of carrying accounts receivable.

C : Unaffected if safety stock is part of the current quarterly order

D : Unaffected if the JIT inventory control system is used.

Answer: A

Question 5

Under throughput costing, the only cost considered to be truly variable in the short run is

Options :

A : Direct materials.

B : Direct Labor

C : Manufacturing overhead.

D : all manufacturing costs are considered variable.

Answer: A