Business Degree Business Administration 4 — Questions and Answers
Question 1: Which of the following is an example of a fixed cost for a manufacturing company?
- Raw materials used in production
- Sales commissions paid to representatives
- Factory rent paid monthly (Correct answer)
- Packaging costs per unit produced
Correct answer: Factory rent paid monthly
Fixed costs remain constant regardless of production volume; factory rent stays the same whether the company produces 100 or 10,000 units.
Question 2: The Balanced Scorecard management framework evaluates performance across which four perspectives?
- Sales, Marketing, Operations, HR
- Financial, Customer, Internal Processes, Learning & Growth (Correct answer)
- Product, Price, Place, Promotion
- Strategy, Execution, Measurement, Feedback
Correct answer: Financial, Customer, Internal Processes, Learning & Growth
The Balanced Scorecard, developed by Kaplan and Norton, assesses organizational performance from Financial, Customer, Internal Process, and Learning & Growth perspectives.
Question 3: In human resources, which federal law prohibits employment discrimination based on race, color, religion, sex, or national origin?
- Fair Labor Standards Act
- Family and Medical Leave Act
- Civil Rights Act of 1964 (Correct answer)
- Americans with Disabilities Act
Correct answer: Civil Rights Act of 1964
Title VII of the Civil Rights Act of 1964 is the landmark federal law that prohibits workplace discrimination based on race, color, religion, sex, or national origin.
Question 4: A business has revenue of $500,000 and total costs of $350,000. What is the profit margin?
- 30% (Correct answer)
- 70%
- 150%
- 43%
Correct answer: 30%
Profit margin = (Revenue − Costs) / Revenue × 100 = ($500,000 − $350,000) / $500,000 × 100 = 30%.
Question 5: Which concept describes the tendency for individuals to exert less effort when working in a group than when working alone?
- Groupthink
- Social loafing (Correct answer)
- Diffusion of responsibility
- Free rider problem
Correct answer: Social loafing
Social loafing is the observed phenomenon where individuals reduce their personal effort when they believe others in the group will compensate.
Question 6: What is the primary advantage of franchising as a business growth strategy?
- The franchisor retains complete operational control
- Growth occurs using franchisees' capital and effort rather than the franchisor's (Correct answer)
- The franchise model eliminates all business risk
- Franchisees share all profits equally with the franchisor
Correct answer: Growth occurs using franchisees' capital and effort rather than the franchisor's
Franchising allows rapid expansion because franchisees invest their own capital to open new locations, reducing the financial burden on the franchisor.
Question 7: Which of the following best defines 'working capital'?
- The total value of a company's long-term assets
- The funds set aside for employee wages
- Current assets minus current liabilities (Correct answer)
- The total equity invested by shareholders
Correct answer: Current assets minus current liabilities
Working capital measures a company's short-term financial health and operational efficiency by subtracting current liabilities from current assets.
Business Degree Business Administration 4
Which of the following is an example of a fixed cost for a manufacturing company?