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Comprehensive budgeting The balance sheet of Watson Company as of December 31, 20X1, follows

Question
	Comprehensive budgeting
The balance sheet of Watson Company as of December 31, 20X1, follows.
WATSON COMPANY
Balance Sheet
December 31, 12X1
Assets
Cash $4,595
Accounts receivable 10,000
Finished goods (575 units x $7.00) 4,025
Direct materials (2,760 units x $0.50) 1,380
Plant & equipment $50,000
Less: Accumulated depreciation 10,000	40,000
Total assets $60,000
Liabilities & Stockholders' Equity
Accounts payable to suppliers $14,000
Common stock $25,000
Retained earnings 21,000	46,000
Total liabilities &. stockholders' equity $60,000

The following information has been extracted from the firm's accounting records:
1.	All sales are made on account at $20 per unit. Sixty percent of the sales are collected in the month of sale; the remaining 40% are collected in the following month. Forecasted sales for the first five months of 20X2 are: January, 1,500 units,- February, 1,600 units; March, 1,800 units; April, 2,000 units; May, 2,100 units.
2.	Management wants to maintain the finished goods inventory at 30% of the following month's sales.
3.	Watson uses four units of direct material in each finished unit. The direct material price has been stable and is expected to remain so over the next six months. Management wants to maintain the ending direct materials inventory at 60% of the following month's production needs.
4.	Seventy percent of all purchases are paid in the month of purchase; the remaining 30% are paid in the subsequent month.
5.	Watson's product requires 30 minutes of direct labor time. Each hour of direct labor costs $7.	

Directors of Windsor Memorial Hospital

Question
	

Directors of Windsor Memorial Hospital has hired you to be their zero-based budget consultant. Specify how Windsor Memorial Hospital can implement a zero-based budget and provide your recommendations to the Board of Directors of the Hospital.
Explain the benefits of implementing your recommendations and justify why you are making these specific recommendations. Your paper must include an introduction, thesis, and conclusion and be four to five page double-spaced (excluding title and reference pages) and formatted according to APA style as outlined in the Ashford Writing Center.
Utilize a minimum of three- to- five scholarly and/or peer-reviewed sources (excluding the course text) that were published within the last five years
	

Smackey Dog Foods, Inc – Scenario Summary

Question
	
Smackey Dog Foods, Inc - Scenario Summary 

Smackey is privately held. 

Smackey Dog Foods, Inc. started in the kitchen of Sarah, Kim, and Jillian’s family home in the suburbs of Chicago. The three sisters initially bought the ingredients for their natural dog food recipes from the local grocery store. They used their dogs and the neighborhood dogs as their taste testers. Their dog food products were so good, the local kennels and veterinary offices were glad to distribute the sisters' products to their customers. 

Local demand increased significantly. Local pet stores and small grocery stores discovered the products and became distributors. The sisters moved the expanding business into a larger facility and hired a few more workers. While their competitors’ sales were flat or declining, Smackey Dog Food, Inc.’s sales were on a vertical climb! 

Sales were so good last year, that the sisters opened a boutique division named Best Boy Gourmet, specializing in freshly manufactured, one-serving packages meant for consumption no later than 3 days after production. They sell this product at 3 times the cost of their other products and by special order only through their new website. Demand is high, but waste has been an issue. 

Sarah is the president and general manager of the operation. Sarah has been very proactive in growing the business. She has met with her banker to discuss expanding the facilities and equipment with another $150,000 loan. Their first loan for $150,000 was secured by the industrial size, food production equipment purchased with the loan. The banker now demands an audit of the corporate financial statements before releasing another loan to the company. Sarah has offered to place the corporate account receivables up as collateral to secure the second loan. Based on revenue projections by her sister Jillian’s sales team, Sarah believes that the company will not have trouble paying down the loan in a short period of time. 

Kim manages the production operations. She oversees the inventory, production, and shipment of dog food products. The Best Boy Gourmet line has taken almost all of her attention lately. The winter holidays are approaching and sales demand based on forecasts from the sales force are higher than ever. Attaining fresh, raw ingredients is more difficult in the winter months. If any of the fresh ingredients are delayed, production comes to a standstill. There has been significant inventory waste as a result. 

Kim’s assistant, Henry, monitors the production and shipment of Smackey Dog Food’s regular line of product. Henry takes pride in his work and is involved in every facet of the operation. With only one other warehouse employee to help, Henry personally is involved in preparing and approving all inventory records. Henry ensures that very little finished inventory sits in the warehouse. However, the shipping dock always seems to be full of returned dog food that should be restocked. When Kim asks him about it, Henry laughs and tells her that "first in first out" applies to dog food returns as well. Kim smiles and just accepts that answer. 

Jillian is not very good at understanding accounting. The sisters placed Jillian in charge of sales. She manages a sales team of 12 salesmen in Illinois, Indiana, and Wisconsin. Her fear of flying and poor driving skills limit her ability to get around to the areas outside of Chicago. As a result, she has placed a lot of faith in her sales team. The sales team complained last year that they did not like waiting for their commissions until after bookkeeping calculated the actual revenues. In order to keep their spirits fired up, Jillian has her sales people project what their sales will be in the upcoming quarter and she pays commissions in advance on those projections. The sales team loves her and Jillian loves their approval. Jillian has noticed that the projections typically are off by 11% on average. 

The employees of Smackey Dog Food, Inc. all own dogs. It was a hiring requirement on the job application. One employee was fired when it was discovered she never owned a dog when she was hired. A lawsuit is pending by the fired employee. 

At this time, the receivables represent 29% of the corporate assets. The Chicago retail chain Pup Stores, Co. is Smackey Dog Food’s largest buyer. They alone represent 31% of overall sales and usually pay within 30 days. However, Pup Stores is facing a major lawsuit from an animal rights group. The legal fees are eating into their cash reserves and they are facing some store closures. 

The accounts receivable aging indicates that 38% of the receivables are 30 days or less. Twenty-two percent are 31-60 days. Twenty-one percent of the receivables are 61-90 days old. Ten percent are 90-120 days. The remaining receivables are older than 120 days. Sarah has not written off any of the receivables, nor will she. 

Sales are projected to steadily grow at 16% next year if the company does not expand its facilities. With the expansion, sales are projected, rising 26%, with the most significant jump in the last quarter after expansion is completed and holiday sales pick up. 



Your Role 

You and your firm, Keller CPAs, have never audited a dog food manufacturer. Although it is late in the year to be accepting a new calendar year-end audit, you need the work and have the time to devote to the audit before your 2-week ski vacation in February. 

You begin the audit process just prior to year-end by sending your audit manager, Pete, and two audit staffers, Ben and Maureen, out to the client. They spend time assessing the client and planning the audit. 

During the first month of field work after year end, Ben and Maureen note that the dog food bags piled high on the docks are marked “Returned.” One employee is seen throwing bags of the premium Best Boy Gourmet dog food into the dumpster in the morning and pulling it out and throwing it into Henry’s car during the employee lunch hour. 

Pete’s new best friend, Alan, was married to Smackey Dog Food, Inc.’s owner, Kim, 4 years ago. Alan is also good friends with the banker from whom Sarah is seeking the loan. Pete is unaware of the relationship. Pete has talked about some of the details of the audit to Alan over a few beers. 
Questions:
Q1: Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc.
Q2: Discuss the essential activities involved in the initial planning of an audit. How do these all specifically to the Smackey Dog Food client?
Q3: Discuss the 4 stages of the audit and the major activities performed by the auditor in each phase. Give an example of how each of these specifically applies to the Smackey Dog Food, Inc audit. For instance, examine the apparent internal control weaknesses and possible negative outcome of each.
Q4: Describe Keller CPAs’ responsibilities related to communications regarding internal control matters. What internal controls issues do you identify?
Q5: You decide that you will address Smackey Dog Food, Inc.’s accounts receivables through confirmations. Discuss the various types of confirmations and what forms you will implement and why.
Q6: What are the major factors affecting sample size for confirming accounts receivable?
Q7: A major issue in verifying the ending balance in property, plant and equipment is the possibility of legal encumbrances. Discuss what specific concerns you have. Describe the procedures your firm will perform to obtain evidence about existing legal encumbrances.
Q8: The client wants to know if you will be present at the year-end inventory. What is your decision and why? What role or actions will you take at the inventory if you decide to attend the inventory? Why?
Q9: Considering the general six functions that make up the inventory and warehousing cycle for Smackey Dog Foods, Inc., identify the related documents and/or records that would be used. From your analysis of the internal controls related to the inventory and warehousing cycle of Smackey Dog Foods, Inc., what internal control weaknesses exist?
Q10: Discuss if Keller CPAs or its auditors are breaching any Professional Rules of Conduct and why or why not?
Q11: Discuss the CPA firm’s legal liability concerns for this audit if they make a material unintentional or intentional mistake. Include any other legal liability concerns regarding possible Professional Rule violations.
	

Business MCQs Test Bank

Question
	

________ consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
A. A marketing research system
B. A promotional campaign
C. A marketing database
D. A marketing information system
E. A marketing intelligence system
2) A ________ is a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment.
A. marketing information system
B. marketing intelligence system
C. vertical system
D. marketing research system
E. product management system
3) A(n) ________ is any good, service, or idea that is perceived by someone as new.
A. product
B. new idea
C. creative product
D. innovation
4) A company can take several steps to improve the quality of its marketing intelligence. If the company purchases competitive products for study, attends open houses and trade shows, and reads competitors’ published reports and stockholder information, the company is using ________ to improve the quality of its marketing intelligence.
A. sales force surrogates
B. external networks
C. advisory panels
D. customer feedback systems
E. intermediaries
5) ________ is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
A. Perceived usefulness
B. Report rating
C. Customer perceived value
D. Competitors market share rate
E. Failure avoidance rate
6) Total customer satisfaction is the general feeling of pleasure or disappointment that results from comparing perceived performance to expectations. To achieve total customer satisfaction, organizations need to_____________.
A. Develop marketing campaigns
B. Manage customer experiences
C. Lower expectations
D. Lower prices
E. Spend more money
7) Most established companies focus on ________ when it comes to innovation.
A. incremental innovation
B. everyday innovation
C. demand innovation
D. competitive innovation
E. continuous innovation
8) The first step in estimating demand is to understand what affects price sensitivity. Generally speaking, customers are most price sensitive to products that cost a lot or are ________.
A. priced low to begin with
B. low-cost
C. bought infrequently
D. bought frequently
9) In ________ marketing, the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers.
A. group
B. general
C. segmented
D. differentiated
E. mass

10) Particularly when shopping for ego-sensitive products such as perfumes and expensive cars, many consumers use price as an indicator of ________.
A. status
B. ability
C. capability
D. size

E. quality
11) The following are considered to be advantages of online research EXCEPT ________.
A. online research is inexpensive
B. online research is relatively free of technological problems and inconsistencies
C. online research is more versatile
D. people tend to be more honest online than in other interviewing methods
E. online research is faster

12) Companies normally budget marketing research at ________ percent of company sales.
A. 1 to 2
B. 4
C. 6.5
D. 10 to 12
E. 2 to 3

13) Which of the following is generally considered to be the last step in the marketing research process?
A. Present the findings.
B. Control the environment.
C. Make the decision.
D. Draft the report
E. Analyze the information.

14) Some intermediaries use the following: strategic planning, advanced information systems, sophisticated marketing tools, measure performance on a return-on-investment basis, segment their markets, improve their target marketing and positioning, and ________.
A. contend with dwindling customer bases
B. aggressively pursue market expansion and diversification strategies
C. aggressively pursue take over strategies
D. aggressively “squeeze” manufacturer margins
E. dominant the manufacturers they do business with

15) “Power prices” use price as a key strategic tool. These “power prices” have discovered the highly ________ effect of price on the bottom line.
A. dramatic
B. soothing
C. leveraged
D. abrasive
E. direct

16) Price has operated as the major determinant of buyer choice among poorer nations, among poorer groups, and with ________ products.
A. identical
B. commodity-type
C. over the Internet
D. similar

17) Marketing communications can contribute to brand equity by establishing the brand in memory and to________ (in)a brand image.
A. create interest
B. craft
C. communicate
D. create demand

18) A company can add new products through acquisition or development. The acquisition route can take three forms. The company can buy other companies, it can acquire patents from other companies, or it can buy a ________ or _________ from another company.
A. license/franchise
B. franchise/acquire rights
C. license/receive permission
D. franchise/co-brand

19) Following the ________ approach to target market selection encompasses a strong
knowledge of the segment’s needs, a strong market presence, and operating economies through specializing in production, distribution, and promotion.
A. single-segment concentration
B. full market coverage
C. product specialization
D. selective specialization
E. market specialization

20) The marketing communications mix consists of six major modes of communications. Which of the following is NOT one of these modes?
A. Personal selling
B. Advertising
C. Sales promotions
D. Direct marketing
E. Packaging

21) To reach Generation Y, rock band Foo Fighters created a digital street team that sends targeted e-mail messages to members who “get the latest news, exclusive audio/video sneak previews, tons of chances to win great Foo Fighters prizes, and become part of the Foo Fighters Family.” Which of the following techniques for reaching Generation Y are the Foo Fighters using?
A. Student ambassadors
B. Online buzz
C. Cool events
D. Unconventional sports
E. Computer games

22) The chief disadvantage to a firm that decides to follow a product specialization strategy in selecting target markets is ________.
A. no synergy exists
B. e-commerce becomes difficult for the company
C. the product may be supplanted by an entirely new technology
D. logistics can become a nightmare
E. competitors can easily copy any new product introductions

23) Major retailer types include the following EXCEPT ________.
A. specialty store
B. superstore
C. catalog showroom
D. discount store
E. the Internet

61) Dimensions of risk include __________.
A. uncertainty about yesterday’s outcome
B. the certainty of a negative outcome
C. the impossibility of the same return
D. uncertainty about the future outcome
62) You do a study and find out that, on average, stock prices for firms decrease 3% for every 5% decrease in inside ownership. You are watching the nightly business report and find out that Magic Tape’s stock has announced that insiders have sold 10% of their holdings. You are concerned because you own 1,000 shares of Magic Tape and it had closed the day before unchanged at $30 per share. If markets are at least semi-strong form efficient, what would you expect?
A. You would lose $2.00 per share
B. You would lose $4,000.
C. You would lose $1,800.
D. You would expect Magic Tape to close at $28 the day of the announcement.
63) Which of the following is not an advantage of going public?
A. Going public achieves liquidity and diversification for current shareholders
B. Going public gives existing shareholders a chance to sell portions of their shares as part of the IPO giving them a cash return on their investment and allows them to diversify their investment portfolios.
C. Going public generally brings a lower price in the public market than in the venture capital or private placement markets.
D. Going public enables a firm to raise additional capital.
64) Which of the following is (are) true?
A. The Principle of Capital Market Efficiency states that differences between financial assets are measured primarily in terms of risk and return. Investors choose the highest return for a given risk level.
B. The Principle of Comparative Advantage states that people apply the Principles of Self-Interested Behavior, Two-Sided Transactions, and Signaling to an environment characterized by similar financial assets, low transaction costs, and intense competition leads to capital market efficiency.
C. The Principle of Valuable Ideas states that new ideas can provide value when first introduced, even in an efficient capital market.
D. all of these answers are correct.
65) Transfer prices are _____.
A. costs of the segment producing the product or service
B. revenues of the segment acquiring the product or service
C. revenues of the segment producing the product or service
D. none of these answers is correct
66) It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 2,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 2,000 scales. If the special order is accepted, what will be the effect on net income?
A. $30,000 increase
B. $4,000 decrease
C. $6,000 decrease
D. $4,000 increase
67) Joint products should be processed beyond the split-off point if _____.
A. incremental expenses exceed incremental revenues
B. sale of the product is guaranteed
C. additional net revenue exceeds the sales value at split-off
D. there is a market for the joint products
68) Incremental analysis would not be appropriate for
A. Analysis of manufacturing variances
B. an allocation of limited resource decision.
C. elimination of an unprofitable segment.
D. a make or buy decision.
69) Which one of the following characteristics would likely be associated with a just-in-time inventory method?
A. An understanding with customers that they may come to the showroom and select from inventory on hand.
B. A backlog of inventory orders not yet shipped.
C. Minimal finished goods inventory on hand.
D. Ending inventory of work in process that would allow several production runs.
70) _____ is an important factor considered by sales forecasters.
A. All of these answers are correct
B. Estimates made by the sales force
C. General economic conditions
D. Past patterns of sales

71) The financing section of a cash budget is needed if there is a cash deficiency or if the ending cash balance is less than:
A. the industry average.
B. the prior years.
C. the amount needed to avoid a service charge at the bank.
D. management's minimum required balance.

72) A _____ gives the expected sales under a given set of conditions.
A. sales forecast
B. sales prediction
C. budget forecast
D. sales budget

73) Which of the following does not appear as a separate section on the cash budget?
A. Financing
B. Cash receipts
C. Capital expenditures
D. Cash disbursements


74) A variable cost is a cost that
A. may or may not be incurred, depending on management's discretion.
B. varies per unit at every level of activity.
C. varies in total in proportion to changes in the level of activity.
D. occurs at various times during the year.
75) A company requires $1,020,000 in sales to meet its net income target. Its contribution margin is 30%, and fixed costs are $180,000. What is the target net income?
A. $126,000.
B. $306,000.
C. $420,000.
D. $234,000.
76) For an activity base to be useful in cost behavior analysis,
A. the activity level should be constant over a period of time.
B. the activity should always be stated in dollars.
C. the activity should always be stated in terms of units.
D. there should be a correlation between changes in the level of activity and changes in costs.
77) How much sales are required to earn a target net income of $128,000 if total fixed costs are $160,000 and the contribution margin ratio is 40%?
A. $320,000.
B. $400,000.
C. $720,000.
D. $648,000.
78) A well-designed activity-based costing system starts with
A. analyzing the activities performed to manufacture a product.
B. identifying the activity-cost pools.
C. assigning manufacturing overhead costs for each activity cost pool to products.
D. computing the activity-based overhead rate.
79) An absorption-costing income statement separates cost into the major categories of_____.
A. all of these answers are correct
B. inventoriable and noninventoriable
C. product and period
D. manufacturing and nonmanufacturing

80) _____ costs relate to more than one product and cannot be separately identified with an individual product
A. Allocable
B. Joint
C. Bundle
D. Common
81) Identify which statement about "currently attainable standards" is NOT true.
A. Employees usually view these goals as reasonable.
B. They represent projections of what will probably be attained.
C. Because they allow for waste, they usually result in favorable variances.
D. They allow for normal spoilage and nonproductive time.
82) The proprietorship form of business organization
A. is classified as a separate legal entity.
B. combines the records of the business with the personal records of the owner.
C. generally receives favorable tax treatment relative to a corporation.
D. must have at least two owners in most states.
83) _____ are profitability ratios.
A. Price earnings and current ratio
B. Earnings per share and dividend yield
C. Dividend payout and rate of return in invested capital
D. Gross profit rate and return on sales
84) Which of the following statements is incorrect with respect to creditors and equity investors?
A. Equity investors are concerned about dividend payments.
B. Creditors are concerned with assessing the long term solvency of a company.
C. Creditors are concerned with assessing the short term liquidity of a company.
D. Both creditors
and equity investors are concerned about security prices.
85) A local retail shop has been operating as a sole proprietorship. The business is growing and now the owner wants to incorporate. Which of the following is not a reason for this owner to incorporate?
A. the ease in transferring shares of the corporation’s stock
B. the prestige of operating as a corporation
C. desire to limit the owner’s personal liability
D. ability to raise capital for expansion
86) Diversity training programs are generally intended to provide a vehicle for _____.
A. socializing otherwise unmanageable employees
B. balancing work/life conflicts
C. eliminating group learning
D. increasing awareness and examining stereotypes
E. focusing on individual differences
87) Although the U.S. has had a longstanding agreement with ___________, after the passage of NAFTA, _________ became the United States' second largest trading partner.
A. Canada, Venezuela
B. Canada, Mexico
C. Mexico, Canada
D. Mexico, Venezuela
E. Great Britain, Paraguay

88) One study found that manufacturing labor costs about ___ an hour in China, compared to ____ dollars in the United States.
A. Less than $1; about 40
B. $2; about 25
C. Less than $1; about 25
D. Less than $1; about 15
E. About $2; about 15
89) The theory of business social responsibility that holds that a business owes duties solely to produce the highest return for its shareholders is:
A. The social audit theory.
B. The corporate citizenship theory.
C. The stakeholder interest theory.
D. The moral minimum theory.
E. The maximizing profits theory.
90) Which of the following is not one of the Caux Round Table Principles for International Business?
A. Responsibility of Business Beyond Shareholders Toward Stakeholders.
B. Promotion of Multiculturalism.
C. Support for Multilateral Trade.
D. Respect for the Environment.
E. Avoidance of Illicit Operations.
91) Which article of the United States Constitution deals with the judicial power of the federal government?
A. Article V.
B. Article III.
C. Article II.
D. Article IV.
E. Article I.
92) Which of the following is correct about litigating commercial disputes?
A. In all states, commercial disputes must be heard in a limited-jurisdiction court.
B. A few states have established specialized trial courts for commercial disputes.
C. Commercial disputes, because of their specialized nature, are first heard at the appellate court level.
D. Businesses generally dislike the concept of specialized trail courts for commercial disputes because the large numbers of consumers who sue businesses in these courts have led the judges to become generally biased against business.
E. Nearly all states have specialized trial courts that hear commercial disputes.
	

Why would the drug maker want to stymie generic competition? Explain

Question
	

Why would the drug maker want to stymie generic competition? Explain.
What types of legal barriers to market entry exist? 
What are the possible ethical dilemmas present in this example? 
Why do you think consumer advocates have expressed concern over such merger possibilities? 
Other than pricing, what are some pitfalls that consumers might have to deal with when 2 major companies merge? 
What are the possible ethical dilemmas present in this example? 
Write approx 100 words each 
	

Question_MJ12E_7Dec

Question
	1. Human resource management is
a. supervising, monitoring, controlling, and disciplining employees in order to achieve
organizational goals.
b. the designing of organizational systems to ensure that human talent is used effectively to
accomplish organizational goals.
c. the use and coordination of human capital to ensure the profitability and survival of the
organization.
d. the design of the organization and its systems in order to achieve the goals of the
organization.
2. HR metrics must be linked to
a. statistical analyses.
b. industry outcomes.
c. business performance.
d. employee satisfaction.
3. All of the following are types of organizational assets EXCEPT
a. social.
b. human.
c. financial.
d. intangible.
4. Which of the following statements is TRUE?
a. Because of the higher quality of Western European education, the return on human capital
for European firms is higher than the return on human capital for U.S. firms.
b. Companies that spend more than 60% of total operating costs on employee costs have
poor returns on investment in their human capital.
c. U.S. firms spend nearly twice as much as European firms on employee salaries and
benefits, but U.S. firms experience higher levels of return on investment for their human
capital.
d. Human capital is the collective value of capabilities, knowledge, skills, life experiences
and motivation of an organizational workforce. Being intangible, it is difficult to measure
the effect of human capital on shareholder value.
5. In a university, the assets that allow all the other assets of the school to be used to offer educational
services to its students are the university’s
a. financial endowment and income.
b. physical plant such as libraries, laboratories and technological learning facilities.
c. administrators, professors, and other employees.
d. intangible assets such as its unique operating processes and specialized research
capabilities.
6. The Chief Financial Officer of McGill Tubing wants to learn the contribution of McGill’s workforce
toward creating value for shareholders. An analysis which would provide this information is the
calculation of
a. the human capital revenue stream.
b. marginal revenue generated per employee.
c. return on human capital investment.
d. profit per employee.
7. Through ____ HR management provides the organization with a sufficient supply of qualified
individuals to fill the jobs in the organization.
a. staffing
b. affirmative action
c. talent management
d. performance management
8. Tyrone Toys is intensely focused on reducing labor costs. During the executive committee’s
discussion of closing its unionized plant in Ohio and opening a non-union plant in Mississippi, the
executive vice president of HR suggests that the committee get legal advice in case Tyrone Toys
would be subject to lawsuits by the union. This interaction suggests that
a. HR is not a strategic partner in this firm because the EVP of HR is reacting to another
committee member’s suggestion, not proactively making his own suggestion.
b. HR is not a strategic partner in the firm because any suggestion about closing a plant
should properly come from HR, not another executive.
c. HR is a strategic partner in the firm because in this firm the EVP of HR is allowed to sit in
on important strategic meetings.
d. HR is a strategic partner in the firm because the EVP of HR a permanent member of the
executive committee.
9. Henry, the production manager for a chemical plant, resents what he feels are unwarranted intrusions
into his territory by HR managers. Henry feels that his relationships with his employees are strong and
supportive, and that HR initiatives generally cause unnecessary trouble and complications.
a. Henry is correct, because the HR function is a support and staff function and should not
intrude on day-to-day management functions.
b. HR managers have the sole responsibility for the proper implementation of company
policy regarding employees. Henry is subverting this process.
c. Henry is probably committing major violations of company policy and wants to keep this
secret from HR management.
d. Henry would be surprised to learn that every manager, including him, is an HR manager.
10. When the human resources function creates a unique capability in a firm that creates high value and
differentiates the organization from its competition, human resources is a/an ____ for the firm.
a. tangible asset
b. core competency
c. critical capability
d. capital contributor
11. As the top HR manager of a medium-sized hospitality business in New Orleans that is heavily
dependent on U.S. and international tourism, you are deeply involved in rebuilding the company’s
strength in the Hurricane Katrina recovery. You need to monitor all of the following factors EXCEPT
a. the employee and labor relations factor of whether unions are targeting hospitality workers
for organization.
b. the global factor of the value of the yen and the euro in relation to the dollar.
c. the legal factor of the enforcement of the Foreign Corrupt Practices Act.
d. the environmental factor of the effect of global warming on hurricane patterns.
12. ____ identifies paths and activities for individual employees as they develop within the organization.
a. Staffing
b. HR development
c. Performance management
d. Career planning
13. Talent management includes which of the following activities?
a. job-skill training
b. wage and salary administration
c. diversity assessment and analysis
d. environmental scanning
14. Compensation and benefits managers in almost all organizations face a major and growing concern
regarding the cost of
a. equalization of pay between men and women.
b. incentive pay.
c. benefits.
d. outsourcing.
15. Most new jobs in the U.S. economy are created by
a. small private sector businesses.
b. federal government agencies and the military.
c. large private sector firms in service industries, particularly health care and technology.
d. traditional, large heavy manufacturing companies.
16. The collective value of the capabilities, knowledge, skills, life experiences and motivation of an
organized workforce is called
a. the organization’s talent inventory.
b. total human resources.
c. human capital.
d. the organization’s intellectual assets.
17. Which of the following is NOT a major HR concern of small businesses?
a. potential unionization efforts
b. shortages of qualified workers
c. compliance with government regulations
d. increasing benefits costs
18. The reason that cooperation between operating managers and HR staff is necessary for HR efforts to
succeed is that
a. HR professionals see the “coarse-grained picture” of organizational strategy while
operating managers see the “fine-grained picture” of daily production.
b. HR designs processes that the operating managers must help implement.
c. HR professionals must implement processes that have been designed by top management
and that impact operating managers.
d. HR professionals must react swiftly to initiatives created by operating managers.
19. Matt has recently joined his family’s wholesale landscape nursery business as vice president of
operations. The firm employs 25 full time employees, plus about 20 seasonal employees. In the past,
Matt’s father personally handled all HR issues. Matt plans to bring the company in line with typical
HR staffing levels. Matt will
a. hire a full-time HR manager and a payroll clerk.
b. add a clerical employee to help with HR tasks.
c. outsource the HR function.
d. hire a full-time HR professional.
20. Woodmere Production Company employees over 2,000 hourly workers. The HR department is
debating the introduction of web-based technology to handle employment applications, employee
benefit enrollments and other re
lated functions. The move to this technology will most affect the HR
department’s ____ role.
a. strategic
b. operational
c. administrative
d. employee advocate
21. Charlotte is describing her new HR position to a friend. She says that she handles most of the clerical
duties involved in running the HR department, including such tasks as maintaining employee files and
submitting governmental reports. Charlotte’s job would fall into the ____ HR role.
a. strategic
b. operational and employee advocate
c. administrative
d. secretarial
22. The ____ role of HR management has been declining in emphasis, whereas the ____ has/have been
increasing in importance.
a. strategic, operational and advocate
b. advocate, operational and administrative
c. operational, administrative and advocate
d. administrative, strategic
23. Considering the trends in HR, current HR departments compared to departments of fifteen years ago
a. would tend to have larger staffs.
b. would have more clerks than professional staff.
c. would be less likely to be strategic partners with top management.
d. would be more tightly linked with vendors of HR specialty services.
24. As the vice-president of HR for Woodmere Production, Inc., you are presenting a proposal to
Woodmere’s top management for outsourcing many of your department’s administrative HR functions
to vendors. You argue that HR vendors have greater expertise than your in-house staff and that
outsourcing will allow you to spend more time on the strategic aspects of HR. But, your key selling-point to top management will be
a. the reduction in labor costs in the HR department.
b. the prestige of retaining a world-class vendor.
c. the ability to have closer contact with HR’s clients, the employees
d. improvement in morale of HR staff.
25. Recruiting and selecting employees for current openings are typical ____ HR activities.
a. employee advocacy
b. operational
c. strategic
d. administrative
26. Which of the following HR activities is MOST likely to be outsourced successfully?
a. 401k administration
b. risk management
c. labor negotiations
d. performance management
27. Ensuring fair and equitable treatment for employees regardless of their personal background or
circumstances is associated with the ____ role of HR.
a. strategic
b. operational
c. employee advocate
d. administrative
28. Which of the following would NOT be identified as a typical HR operational activity?
a. government compliance
b. safety programs
c. compensation
d. partnering with top executives
29. The HR management role that is most influential in reducing the number of employee lawsuits against
the company is the ____ role.
a. strategic
b. advocate
c. operational
d. administrative
30. You are the recruiter for an ophthalmologic products company. Your firm needs a scientist with a
highly-specialized background. You have been unable to lure any scientist with the needed
qualifications to your firm, even though you have offered a very high salary. After intensive searching,
you have found a Peruvian scientist with impeccable credentials who is interested in moving back to
the U.S. Which problem are you most likely to encounter?
a. The inability of the scientist to adapt to the U.S. work culture.
b. Tight immigration quotas for high skilled workers.
c. Your current scientific employees fearing that their work will be outsourced overseas.
d. The difficulty in meeting the salary expectations of the Peruvian scientist.	

Firm A has $10,000 in assets entirely financed with equity

Question
	


Firm A has $10,000 in assets entirely financed with equity. Firm B also has $10,000 in assets, but these assets are financed by $5,000 in debt (with a 10 percent rate of interest) and $5,000 in equity. Both firms sell 10,000 units of output at $2.50 per unit. The variable costs of production are $1, and fixed production costs are $12,000. (To ease the calculation, assume no income tax)

a. What is the operating income (EBIT) for both firms?

b. What are the earnings after interest?
c. If sales increase by 10 percent to 11,000 units, by what percentage
will each firm’s earnings after interest increase?
d. Why are the percentage changes different?

	

Taxation Working Problems

Question
	

1. Matthew borrows $250,000 to invest in bonds. During 2012, his interest on the loan is $30,000. Matthew's interest income from the bonds is $10,000. This is Matthew's only investment income. 
A. Calculate Matthew's itemized deduction for investment interest for the year
B. Is Matthew entitled to a deduction in future years? Explain.
2. Helen paid the following amounts of interest during the 2012 tax year:
Mortgage interest on Dallas residence (loan balance $50,000) $2,025
Automobile loan interest (personal use only) $440
Mortgage interest on Vail residence (loan balance $50,000) $3,050
Visa and Mastercard Interest $165
Calculate the amount of Helen's itemized deduction for interest (after limitations) for 2012.
3. Jerry made the following contributions during 2012:
His synagogue (by check) $680
The Democratic Party (by check) $180
The American Red Cross (by check) $150
His lodge for a holiday party $100
In addition, Jerry donated used furniture to the Salvation Army costing $2,000 with a fair market value of $400. Assuming Jerry has AGI of $45,000, has the necessary written acknowledgments, and itemizes deductions, complete the Gifts to Charity section of Schedule A to show Jerry's deduction for 2012.
4. Richard donates publicly traded Gold Company stock with a basis of $1,000 and a fair market value of $15,000 to the college he attended, which is considered a public charity. Richard has owned the shares for 10 years. How is this contribution treated on Richard's tax return?
	

Law Multiple Choice Questions

Question
	

1. A broker told you the size of the grass area of the yard of the house you bought was 6,000 square feet. However, the grass covered only 5,000 square feet. The lawn size meant nothing to you; you didn't want a big yard anyway because you hated mowing the lawn.You liked the house because it was near a 
mall and good schools. But after buying the house, you realized that the floor plan was terrible and you wanted out.You sue the broker for misrepresentation concerning the yard. 
A. You don't win because the misrepresentation didn't actually mislead you in a way that caused harm. The element of causation of the harm was lacking. 
B. You don't win because the broker was only reckless in coming up with that footage figure, and didn't intentionally lie. 
C. You win because brokers are agents and should be punished for any misrepresentation, even done in good faith. 
D. You win because the misrepresentation was about something important.
2. Your friend from Australia visits, and you invite him to a hockey game. “What’s hockey, mate?” he asks. Only a few minutes into the game, he sees a hockey puck coming straight at him.Your friend has had a few beers, fails to duck, and is knocked unconscious. When he awakens, he sues the hockey team. Which of the following is the best defense for the team? 
A. Assumption of risk C. Sovereign immunity 
B. Contributory/comparative negligence D. Failure to mitigate
3. Which of the following determines whether a plaintiff assumed a risk? 
A. Whether he or she is a fiduciary 
B. What a “reasonable person” would know about the risks 
C. Whether the risk meets the objective standard 
D. What the plaintiff actually knew about the risks
4. How does assault differ from battery? 
A. Battery is an injury to person; assault is an injury to property. 
B. Battery requires only the expectation of contact; assault requires contact. 
C. Assault requires only the expectation of contact; battery requires contact. 
D. Assault doesn’t differ from battery; they’re the same tort.
5. Every autumn, apples from your tree fall onto your neighbor’s grass. “In my opinion, those are great apples.You’re lucky,” you tell him when he complains.You refuse to remove them. The fruit attracts trespassing boys, then rots and brings bees. What torts might your apple-hating neighbor successfully sue you for? 
A. Public nuisance 
B. Trespass to land and private nuisance 
C. Strict product liability for slippery, dangerous, rotting apples 
D. Misrepresentation for your opinion about the greatness of the apples
6. In the case described in the preceding question, what defense(s) could you reasonably raise? 
A. Failure to mitigate—the neighbor could have raked the apples up with minimal burden. 
B. Charitable immunity—you’ve charitably donated the apples to him. 
C. Consent—there’s an implied consent when buying a house to living with natural events such as falling apples, dogs trampling your flower garden, and the occasional rotten egg thrown at your house on Halloween. 
D. Lack of intent—you didn’t place the apples in his yard.
7. You get the assignment to write a newspaper story about a local hobbyist and take a dislike to the man during the interview. When you write the article, you throw in the assertion that he molested neighborhood children.You won’t be liable for defamation if 
A. the plaintiff consented to you writing a story about his hobby. 
B. the plaintiff is a public figure. 
C. what you said is true. 
D. only one other person besides the plaintiff saw your statement.
8. The defendant walked up to the plaintiff, a stranger, and quietly demanded her money. No weapon was used. However, the plaintiff felt intimidated and handed over her purse. After this episode, she suffered nightmares for several weeks and required a sleeping pill prescription. 
A. The plaintiff has a case for conversion and appropriation. 
B. The plaintiff has a case for conversion and intentional infliction of emotional distress. 
C. The plaintiff has a case for conversion but not intentional infliction of emotional distress. (Among other reasons, the facts don’t suggest intent or outrageous or extreme behavior by the defendant.) 
D. The plaintiff has a case for battery and conversion.
9. You’re sitting in your easy chair reading a magazine by the light of your picture window.You look up just in time to see a boy throw a rock at the window. Instinctively, you duck, but the rock shatters the window and hits you before it falls to the floor. The boy takes off running, but the police pick him up later.What are the torts you could reasonably claim the boy committed? 
A. Assault 
B. Assault and battery 
C. Assault, battery, and conversion 
D. Assault, battery, conversion, and trespass
10. An intoxicated man standing on the other side of a wide river shouts at you, threatening to “punch your lights out.” He would, in all probability, be found to have committed 
A. assault. 
B. assault and battery. 
C. no tort, since the element of expectation was absent. 
D. negligence.
11. You hire Frank to make deliveries for your office supply business. Frank has a history of driving while intoxicated, but he didn’t reveal his driving history to you when applying for the job. Thus, you had no way of knowing that he was dangerous on the roads. After a week in your employment, he drunkenly crashes the company van into a legally parked car while making his deliveries. Which one of the following statements is correct? 
A. You were reasonably careful in hiring Frank and had no reason to suspect the danger he posed. Because you weren’t negligent, you can’t be held liable for 
Frank’s negligence. 
B. You can be held liable for Frank’s negligence under the doctrine of res ipsa loquitur. 
C. You can be held liable for Frank’s actions under the doctrine of respondeat superior or vicarious liability. 
D. Because Frank had the accident while acting as an employee, only you as his employer— not Frank personally—can be held liable for negligence.
12. In the preceding question, imagine that the plaintiff’s car, which Frank struck, was illegally parked—it was sticking out too far into the street, and the parking meter had expired. If Frank hadn’t been drunk, he probably could have avoided hitting the car. However, the careless way the car was parked did help cause the accident. Which one of the following statements is correct? 
A. Frank could raise the defense of comparative negligence, depending on the jurisdiction. In most provinces, the effect of this defense would simply be to lessen the award to the owner of the parked car by the percentage he was responsible for the accident. 
B. The defense of assumption of risk is Frank’s best bet. 
C. Frank could raise the defense of the plaintiff’s negligence. In most provinces, if the plaintiff’s negligence was partly to blame for the injury, the plaintiff can’t recover anything. 
D. By failing to put money in the parking meter, the plaintiff violated a statute and is liable under the doctrine of negligence per se.
13. Which one of the following is not an element of strict liability? 
A. Defective product C. Buyer suffers physical injury 
B. Seller sells to buyer D. With intent to mislead buyer
14. A neighbor’s tree branch partially broke in an ice storm two months ago. Ever since the storm, the branch strikes your window whenever the wind blows. Since the neighbor is vacationing in Florida for three months, you decide to saw the branch yourself. In the event of a lawsuit, your defense will be 
A. privilege to abate a nuisance. C. failure to investigate. 
B. defense of property. D. contributory negligence.
15. You’re seen running from a jewelry store that has just been robbed. The jeweler gives chase and just as he catches up with you, you throw a bag into the river. The jeweler performs a citizen’s arrest and holds you until the police arrive. Because the bag in the river was never found, at trial you’re declared “not guilty.” You now decide to sue the jeweler. What is the likely outcome? 
A. You lose. There’s no tort that protects people from being confined unfairly. 
B. You win because there was no basis to suspect you of stealing. 
C. You lose because your detention was reasonable. There was a real basis for suspecting that you committed the crime. 
D. You lose. Shop owners can hold anyone they want if they suspect them of stealing. Reasonable suspicion isn’t needed.
16. A radio station plays a commercial for Beefy’s restaurant. The station created the commercial by editing the voice of a famous movie star from a recent movie to make it sound like the star loved Beefy’s. The star didn’t give permission for this commercial and has never even been to Beefy’s. Which one of the following statements is correct? 
A. The star is guilty of negligent misrepresentation, although not intentional misrepresentation. 
B. The radio station is guilty of appropriation. 
C. The radio station is guilty of slandering the restaurant. 
D. The radio station is guilty of negligence.
17. The elements of negligence may be best summarized as 
A. never causing injury to anyone. 
B. the duty to avoid reckless behavior, breach of that duty causing harm to the plaintiff. 
C. duty to act with care, breach of that duty by defendant causing damage. 
D. duty to act with care, in light of the subjective standard of who you are, breaching that duty and causing the plaintiff damage.
18. You’re a sports agent. A recently graduated basketball player headed for the big time signs a contract with Jack, another agent.You get the basketball player alone and convince her to break the contract and hire you as her agent.You did this by saying horrible things about Jack, some of which were true. Which one of the following statements is correct? 
A. Jack can sue the basketball player for libel. 
B. Jack can sue you for breach of contract. 
C. Jack can sue the basketball player for interference with contract. 
D. Jack can sue you for interference with contract.
19. In most invasion of privacy torts, 
A. public figures who sue media defendants must show a higher level of misbehavior by the defendant than private persons. 
B. public figures and private persons are treated the same way under common law. 
C. private persons who sue media defendants must show a higher level of misbehavior by the defendant than public figures. 
D. Most provinces have abolished invasion of privacy torts.
20. Which one of the following is an example of a fiduciary? 
A. Buyer C. Seller 
B. Doctor D. Plaintiff
	

CMGT 583 WEEK 4 DQS(Question 1 & 2)

Question
	
Q. 1. Are there
IT functions that should never be outsourced? Explain which functions those are
and why you think outsourcing is not an option?

Q.2.
Why does outsourcing have a negative stereotype? What might be done to change
negative perceptions to positive ones?