Question 1

MVB Inc.obtains a return of 9.8% from assets worth $248.5 million. Calculate its net profit.

Accepted Answer

A)  $105.9 million 
B)  $36.8 million 
C)  $24.3 million 
D)  $76.2 million 
E)  $60.4 million 
A)  $105.9 million 
B)  $36.8 million 
C)  $24.3 million 
D)  $76.2 million 
E)  $60.4 million C

Question 2

Javier's Pizza Point has a margin per unit of $2.00 for a typical pizza, total fixed expenses of $10,000, and average variable costs of $3.00 per pizza. How many pizzas must Javier sell to break even?

Accepted Answer

A)  2,000 
B)  3,334 
C)  5,000 
D)  20,000 
E)  30,000 
A)  2,000 
B)  3,334 
C)  5,000 
D)  20,000 
E)  30,000 C

Question 3

Calculate the marketing expense variance, if the actual marketing expense and marketing expenses estimated in the plan are $98,000 and $80,000, respectively. The actual percentage of sales is 15%.

Accepted Answer

A)  $27,000 
B)  $1,800 
C)  $2,700 
D)  $18,000 
E)  $270,000 
A)  $27,000 
B)  $1,800 
C)  $2,700 
D)  $18,000 
E)  $270,000 D

Question 4

Calculate a business's return on sales when it makes a net profit of $500,000 from sales of $3 million.

Accepted Answer

A)  60% 
B)  16.7% 
C)  30.5% 
D)  50.5% 
E)  24.8% 
A)  60% 
B)  16.7% 
C)  30.5% 
D)  50.5% 
E)  24.8%

Question 5

Calculate the total market demand if a business sells 48,000 units, which represents a market share of 32%.

Accepted Answer

A)  224,500 
B)  265,000 
C)  196,000 
D)  150,000 
E)  125,300 
A)  224,500 
B)  265,000 
C)  196,000 
D)  150,000 
E)  125,300

Question 6

Milton-Normand Inc. obtains a return of 13.5% from total invested capital of $790.6 million. Calculate the net profit it generates.

Accepted Answer

A)  $325.3 million 
B)  $159 million 
C)  $84.7 million 
D)  $233.5 million 
E)  $106.7 million 
A)  $325.3 million 
B)  $159 million 
C)  $84.7 million 
D)  $233.5 million 
E)  $106.7 million

Question 7

Calculate the total marketing and sales expenses incurred by a business if it produces 30,000 units at $15 per unit and its net marketing contribution is $225,000.

Accepted Answer

A)  $300,000 
B)  $150,000 
C)  $625,000 
D)  $225,000 
E)  $450,000 
A)  $300,000 
B)  $150,000 
C)  $625,000 
D)  $225,000 
E)  $450,000

Question 8

Calculate the total volume of units sold by a business if there is a market demand of 550,000 units and the business has a market share of 25%.

Accepted Answer

A)  292,560 
B)  440,650 
C)  137,500 
D)  325,000 
E)  110,190 
A)  292,560 
B)  440,650 
C)  137,500 
D)  325,000 
E)  110,190

Exam 1: Market Based Management