Accounting Derivatives
This set of 28 questions, taken from prior examinations, covers topics in Chapters 6, 7, and 9.
The purpose of sample multiple choice questions is to acquaint you with the style and substance of typical exam questions on this material.
Please be aware that:
1. multiple choice format questions are only one of many resources available to prepare for testing events – reading textbook chapters and working through chapter examples, studying the end-of-chapter review problem and accompanying solution, and reviewing assigned homework items and the published solutions may be more powerful methods to increase your understanding of the topics covered in the course.
2. the exam questions used this quarter will be similar but different from these example questions – understanding the main concepts in each chapter is critical to success on the testing events; remembering a sample question may be of some help but the format of questions on the same topic often differs rendering memory a distant second choice to understanding.
The Questions:
Part 1
Use the following to answer questions 1-2:
Donnelly Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable expense was $2.25 per unit.
The company needed to sell 20,000 shirts to break even. The net operating income last year was $8,400. Donnelly's expectations for the coming year include the following:
* The selling price of the T-shirts will be $9.00.
* Variable expenses will increase by one third.
* Fixed expenses will increase by 10 percent.
1. The number of T-shirts Donnelly Corporation must sell to break even in the coming year is:
A) 17,500. B) 20,000. C) 22,000. D) 19,250.
2. If Donnelly Corporation wishes to earn $22,500 in net operating income for the coming year, the company's sales volume in dollars must be:
A) $229,500. B) $213,750.
The purpose of sample multiple choice questions is to acquaint you with the style and substance of typical exam questions on this material.
Please be aware that:
1. multiple choice format questions are only one of many resources available to prepare for testing events – reading textbook chapters and working through chapter examples, studying the end-of-chapter review problem and accompanying solution, and reviewing assigned homework items and the published solutions may be more powerful methods to increase your understanding of the topics covered in the course.
2. the exam questions used this quarter will be similar but different from these example questions – understanding the main concepts in each chapter is critical to success on the testing events; remembering a sample question may be of some help but the format of questions on the same topic often differs rendering memory a distant second choice to understanding.
The Questions:
Part 1
Use the following to answer questions 1-2:
Donnelly Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable expense was $2.25 per unit.
The company needed to sell 20,000 shirts to break even. The net operating income last year was $8,400. Donnelly's expectations for the coming year include the following:
* The selling price of the T-shirts will be $9.00.
* Variable expenses will increase by one third.
* Fixed expenses will increase by 10 percent.
1. The number of T-shirts Donnelly Corporation must sell to break even in the coming year is:
A) 17,500. B) 20,000. C) 22,000. D) 19,250.
2. If Donnelly Corporation wishes to earn $22,500 in net operating income for the coming year, the company's sales volume in dollars must be:
A) $229,500. B) $213,750.