Business Maths Examination

BUSINESS MATHEMATICS EXAMINATION


1. Mike and Bill sell cars for Jangle’s Auto. Over the past year they sold 640 cars. Assuming Mike sells 3 times as many as Bill how many cars did Mike sell?
a. 480
b. 160
c. 180
d. 500

USE THE FOLLOWING INFORMATION FOR QUESTIONS 2-4: Callie Company makes Curley Cuddles, a soft stuffed puppy for toddlers. Cost information for each stuffed animal is shown below.

Direct Materials
$1.80
Direct Labour
$1.20
Variable overhead
$0.60
Variable Selling Expenses
$0.40
Total Variable Costs
$4.00
Total Fixed overhead
$324,000
Each stuffed puppy sells for $6.00. Current annual production and sales volume is 180,000 Curley Cuddles.

2. What is Callie Company’s breakeven point in terms of number of Curley Cuddles?
a. 162000
b. 141481
c. 127318
d. 124889
3. If Callie Company wants to earn $60,000 in before tax profits, how many dollars must sales be? (Round to the nearest dollar)
a. $1,080,000
b. $1,152,000
c. $1,222,000
d. $1,210,000
4. If Callie Company wants to earn $70,000 in before tax profits, how many units must it sell?
a. 162,000
b. 186,500
c. 197,000
d. 204,857


5. A company is in the process of developing its sales budget. The following information is available:
Variable expenses per unit
$4
Total fixed expenses
$1100
Desired net income
$4600
Projected sales
1,500 units
What per unit sales price should be set to achieve the desired net income (profit)?
a. $4.00
b. $4.73
c. $6.33
d. $7.80
6. Which of the following describes the behavior of the fixed cost per unit?
a. Decreases with increasing production
b. Increase with increasing production
c. Decreases with decreasing production
d. Remains constant with changes in production
7. Red Jeans sells jeans that cost $16.55 for a selling price of $35.99. The percent of markup based on cost is:
a. 117.46%
b. 194.44%
c. 54.02%
d. 37.07%
8. Which of the following manufacturing costs is a variable cost of producing furniture?
a. Straight line depreciation on equipment
b. Property taxes on factory buildings
c. Lumber
d. Plant supervisors salary

9. Mellisa Co. borrowed money that is to be repaid in 7 years. So that the loan will be paid back at the end of the 7th year, the company invests $12,000 at the end of each year at 12 percent compounded annually. The amount of original loan was:
a. $54768
b. $121068
c. $121680
d. $54678
10. Earl miller deposited $25,000 at Y bank at an interest rate of 12% compounded quarterly. The effective rate is:
a. 12%
b. 12.55%
c. 12.15%
d. 12.35
11. Jill went to the sunshine Bank. She borrowed $6500 at a rate of 12 3/4% . The date of the loan was September 5. Jill hoped to repay the loan off January 15. How much will Jill pay using simple interest?
a. $303.887
b. $6803.88
c. $299.71
d. $6799.71
12. Last year a small statistical consulting company paid each of its five statistical clerks $22,000, two statistical analysts $50,000 each and the senior statistician/owner $270,000. The number of employees earning less than the mean salary is:
a. 0
b. 4
c. 5
d. 7
13. During the past few months major league baseball players were in the process of negotiating with the team owners for higher minimum salaries and fringe benefits. At time of the negotiations, most of the major league baseball players had salaries in the $100,000 to $150,000 a year range. However there were a handful of players who via the free agent system, earned nearly three million dollars per year. Which measure of central tendency of players salaries the mean, or the median, might the players have used in an attempt to convince the team owners that they were deserving of higher salaries and more fringe benefits?
a. Not enough information is given to answer question
b. Either one, since all measures of measures of central tendency are basically the same
c. Mean
d. Median
14. Depreciation:
a. Measures the decline in market value of an asset
b. Measures the physical deterioration of an asset
c. Is the process of allocating to expense the cost of a plant asset.
d. Is an outflow of cash from the use of a plant asset.
15. A sample of 99 distances has a mean of 24 feet and a median of 24.5 feet. Unfortunately it has just been discovered that an observation that was erroneously recorded as 30 actually had a value of 35. If we make this correction to the data, then:
a. The mean remains the same, but the median is increased
b. The mean and median remain the same
c. The median remains the same, but the mean is increased
d. The mean and median are both increased

16. A company purchased a tract of land for its natural resources at a cost of $1,500,000. It expects to mine 2,000,000 tons of ore from this land. The salvage value of the land is expected to be $250,000. The depletion expense per ton of ore is: Cannot be computed since all of the values are not known
a. $0.75
b. $0.625
c. $8.00
d. $6.00
17. The price of a calculator dropped from $32.88 to $25.95. What was the percent decrease in price?
e. 26.70%
f. 26.71%
g. 21.08%
h. 21.07%

18. When testing water for chemical impurities results are often reported as bdl, ie below description limit. The following are the measurements of the amount of lead in a series of water samples taken from inner city households (ppm). 5, 7, 12, bdl, 10, 8, bdl, 20, 6. Which is correct?
a. The mean lead level in the water is about 10ppm
b. The mean lead level in the water is about 8ppm
c. The median lead level in the water is 7 ppm
d. The median lead level in the water is 8 ppm.
19. A 8- year annuity due has a future value of $1000. If the interest rate is 5%, the amount of each annuity payment is closest to which of the following?
a. $154.73
b. $147.36
c. $99.74
d. $104.72
20. A five year annuity due has periodic cash flow of $100 each year. If interest rate is 8%, the present value of this annuity is closest to which of the following?
a. $331.20
b. $399.30
c. $431.24
d. $486.65
21. Which of the following statements is TRUE?
a. The present value of an annuity due is greater than the present value of an ordinary annuity
b. The present value of an ordinary annuity is greater than the present value of an annuity due
c. The future value of an ordinary annuity is greater than the future value of an annuity due.
d. Both B and C are correct
22. Ray wants to retire at age 75 years. Ray who is now 60 believes he will need $200,000 to retire comfortably. To date he has set aside no retirement money. If he gets an interest of 12% compounded semiannually how much would he have to invest today.
a. $26020
b. $34820
c. $82000
d. $91000
23. Ray Shelf knows his goods are marked up 42% on cost. If a TV cost Ray $350 the selling price would be:
a. $479
b. $603.44
c. $497
d. $630.40
24. A dress was originally selling for $150. Due to changing styles the first markdown was 10% and the second 20%. The dress still did not sell so a final markdown of 5% was taken. The sale price is currently:
e. $112.50
f. $102.60
g. $135.00
h. $105.00
25. A house cost Ms. Jones C dollars in 1965. Three years later she sold the house for 25% more than she paid for it. She has to pay a tax of 50% of the gain. ( The gain is the selling price minus the cost) How much tax must Ms. Jones pay
i. 1/24 C
j. C/8
k. ¼ C
l. C/2

Income (in dollars)
Tax ( in dollars)
0 – 4000
1% of income
4000 – 6000
$40 + 2% of income over 4000
6000 – 8000
$80 + 3% of income over 6000
8000 – 10000
$140 + 4% of income over 8000
10000 – 15000
$220 + 5% of income over 10000
15000 – 25000
$470 + 6% of income over 15000
25000 - 50000
$1070 + 7% of income over 25000
26. How much tax is due on an income of $7500
m. 75
n. 80
o. 125
p. 150
27. Your income for a year is $26,000. You receive a raise so that next year your income will be $29,000. How much more will you pay in taxes next year if the tax rate remains the same?
q. $70
r. $180
s. $200
t. $210
28. A person who has an income of $10,000 pays what percent of his or her income in taxes?
u. 2
v. 3
w. 4
x. 5
29.Given that x and y are real numbers let S(x,y)= x2 – y2. Then S(3, S(3,4)) =
y. -40
z. -7
aa. 40
bb. 49
30. Jane Foss is a sales clerk at Mac Store. She is paid $7.50 per hour plus commission of 3% on all sales. Assuming Jane works 34 hours and has sales of $3500 her gross pay is:
cc. $105
dd. $255
ee. $360
ff. $465
31. Which of the following inequalities is the solution to the inequality 7x-5<12x+18
a. X < -13/5
b. X > -23/5
c. X < -23/5
d. X > 23/5
32. Successive discounts of 20% and 15% are equal to a single discount of
a. 30%
b. 32%
c. 34%
d. 35%
33. The assessed value of a house is $72,000. The assessed value is 60% of the market value of the house. If taxes are $3 for every $1000 of the market value of the house, how much are the taxes on the house?
a. 216
b. 360
c. 1386
d. 2160
34. The following are appraised values of houses on a certain street: $100000, $80,000, $90000 and $200,000. If the $80,000 house burns down and is replaced by a $100,000 house how will it affect the mean, median and mode of the housing prices?
a. The mean, median and mode are all changed
b. The mean and median change, the modes is unchanged
c. The median changes; the mean and mode remain the same
d. The mean changes, the median and mode are unchanged
35. Jill Hartman earns $750 per week plus 3% of sales in excess of $6500. If Jill sells $25,000 in the first week her earnings are:
a. $945
b. $1305
c. $1500
d. $1503
36. Your broker offers to sell you a note for $11,300 that will pay $2000 per year for 10 years, if you buy the note what rate of interest will you be earning?
a. 12%
b. 15%
c. 10%
d. 13%

37. A company received an invoice of $9325.00 dated June 25, terms 5/15, n/30 R.O.G., for a shipment of stereo equipment that arrived on August 2. How much was paid on August 13 to reduce the balance to $4,000?
a. $5058.75
b. $5325.00
c. $3800.00
d. $4526.25
38. Determine the net cost of a power drill listed at $850.00 with a discount series of 20%, 12.5%, 5% and 5%.
a. $551.50
b. $5.31
c. $536.99
d. $807.50
39. Mel’s Dress Shop received an invoice dated July 17 for $1200, with terms of 2/10, 1/15, n/60. On July 20, Mels Dress Shop sent a partial payment of $650. The actual amount that should be credited is:
a. $637
b. $663
c. $663.27
d. $663.72
40. A shopkeeper bought some cassettes, and sold them to her friends at a markup of 50% on cost. How much did the record cost, if she had sold them for $66?
a. 33
b. 44
c. 132
d. 40
41. What is the percentage change between 1996 and 1997?
a. 228%
b. 34%
c. 301%
d. -77%
42. Consider the following definition of the function f:
f(x) = 3 – x if x< 0
x2 + 2 if x>= 0
Evaluate f(-3)
a. 6
b. 0
c. 11
d. –7

Use the following data to answer question 46-48
Acquisition cost of asset - $25,000
Salvage Value $3,000
Useful Life 4 years
Expected output of machine 25000 units

43. Based on the straight line method the first years depreciation will be:
a. $4,460
b. $5,500
c. $6,250
d. $8,800

44. Based on the sum of the years digits method, the first years depreciation will be:
a. $4,460
b. $5,500
c. $6,250
d. $8,800

45. If the actual usage of the asset in the first year is 7,200 units, then depreciation under the units of production method will be:
a. $4,400
b. $5,500
c. $6,600
d. $7,200

46. When a firm uses first-in-first-out (FIFO) accounting: COGS reflect the cost of items purchased:
a. first and ending reflects the value of the items purchased first
b. first and ending inventory reflects the cost of the most recent purchases
c. most recently and ending inventory reflects the cost of items purchased most recently
d. most recently and ending inventory reflects the cost of items purchased first.

Use the following data to answer questions 47-48
Date Purchases Sales
Mar 1 40 units at $30 13 units at $35
Mar 15 20 units at $40 35 units at $45
Mar 25 90 units at $50 60 units at $60
Assume beginning inventory was zero.

47. Inventory value at the end of the period using FIFO is
a. $1200
b. $2100
c. $2400
d. $6000

48. Inventory value at the end of the period using LIFO is
a. $1200
b. $1280
c. $2100
d. $2400

49. During period of falling prices:
a. LIFO income>weighted average income>FIFO income
b. LIFO income < weighted average incomec. LIFO income = weighted average income=FIFO income
d. LIFO COGSFIFO COGS

50. Beta Co has a loan covenant requiring it to maintain a current ratio of 1.5 or better. As Beta approaches year-end current assets are $20 million ($1 mil in cash, $9 mil in accounts receivables and $10 mil in inventory) and current liabilities are $13.5 million. What is Beta’s current ratio?
a. 0.675 times
b. 1.480 times
c. 1.50 times
d. 0.74 times

51. Using the information from question 8 to determine the quick ratio?
a. 0.675 times
b. 0.74 times
c. 0.81 times
d. 1.48 times
52. Last month, the balance in Tisha's checkbook was $1219.17. Since then she has deposited her latest paycheck of $2425.66 and written checks for $850.00 (rent), $235.89 (car payment), and $418.37 (credit card payment). What is the current balance in Tisha's checking account rounded to the nearest ones?
a. $2141.00
b. $2140.57
c. $3215.27
d. $5149.00

53.Assume that $100,000 is borrowed on January 1 of Year 1, at 5% interest per annum. On December 31, of Year 1, an $8,000 payment is made. On December 31, of year 2, another $8,000 payment is made. Using normal assumptions about interest and principal reduction, how much is the unpaid balance of the loan after the second payment?
a. $100,000
b. $94,000
c. $93,850
d. 84,000

54. You are thinking of borrowing $250,000 to buy a new house. If you are going to finance this purchase at 12% interest per annum, and make 360 level monthly payments to pay off the loan, how much will your payments be?
a. $250,000/360
b. $250,000/present value factor for lump sum at 360 months and 1% per period
c. $250,000/present value factor for annuity of 360 months at 1% per period
d. $250,000 X present value factor for annuity of 360 months at 1% per period




55. Which of the following tables of values represents the linear relationship y=2x

a X Y

0 1
2 4
5 25
b X Y

0 1
3 8
4 16

c
X Y

0 0
1 2
3 6

d X Y

0 0
2 4
6 36



56. Tim shows the steps he took in simplifying the following algebraic expression

STEP 1 =( a2 )3 STEP 2 = a5
a2 X a3 a2 x a3

STEP 3 = a5 STEP 4 = 1
a5
(a) STEP 1 (b) STEP 2 (c) STEP 3 (d) STEP 4

57. Find the roots of the following equation 2x2+5x+2=0
(a) [0,0] (b) [-7,-5.25] (c) [0,-7] (d) [7,5]

58.
NOONTIME TEMPERATURE IN HILO, HAWAII
Mon
Tue
Wed
Thu
Fri
Sat
Sun
66
78
75
69
78
77
70

The table above shows the temperatures, in degrees Fahrenhait, in a city in Hawaii over a one-week period. If m represents the median temperature, f represents the temperature that occurs most often, and a represents the average (arithmetic mean) of the seven temperatures, which of the following is the correct order of m, f, and a?

(A) a


59. The projected sales volume of a video game cartridge is given by the function

S(P)=3000
2p+a
Where S is the number of cartridges sold, in thousands; P is the price per cartridge, in dollars; and a is a constant. If according to the projections, 100,000 cartridges are sold at $ 10 per cartridge, how many cartridges will be sold at $20 per cartridge?
(a) 20,000 (b) 50,000 (c) 60,000 (d) 150,000 (e) 200,000

60. x>1 and what is the value of m?
(a) –7/2 (b) –3 (c) –5/2 (d) –2 ( e) –3/2