# 64 what is the quot operating income quot assuming 250 people attend and option two 4302260

64) What is the “operating income” assuming 250 people attend and option two is chosen?

64) ______ A) $620 B) $4,620 C) $2,900 D) $2,750 E) $7,329

65) How many people must purchase tickets assuming option two is chosen, and Big Sports expects to raise $4,820 for the athletic fund? Assume no one pays more than the cost of his/her ticket.

65) ______ A) 514 people B) 610 people C) 600 people D) 720 people E) 257 people

66) A decision model is used for

66) ______ A) enabling managers to deal with uncertainty using both quantitative and qualitative analyses. B) enabling managers to deal with events using a qualitative analysis method. C) identifying factors that distinguish an action from an event D) determining if a budgeted amount will be the same as an actual amount. E) determining if a budgeted amount will deviate from an actual amount.

67) Events, as distinguished from actions, would include

67) ______ A) personnel policy options. B) decisions on direct material vendors. C) price changes of the company's products. D) decisions on time schedules. E) a financial recession.

68) Expected monetary value may be defined as

68) ______ A) the weighted average of all mutually exclusive outcomes. B) the probability that each outcome will not occur. C) the weighted average of the outcomes with the probability of each outcome serving as the weight. D) the average of all possible outcomes. E) the weighted average of all possible outcomes.

69) What would be the expected monetary value for the following data using the probability method?

Probability

Cash Inflows

0.15$200,000

0.25$175,000

0.30$160,000

0.40$

0

69) ______ A) $30,000 B) $116,525 C) $374,500 D) $121,750 E) $250,000

*Use the information below to answer the following question(s):*

Joan Perry has three booth rental options at the bridal fair where she plans to sell her new product. The booth rental options are:

Option 1: $4,000 fixed fee

Option 2: $3,000 fixed fee + 5% of all revenues generated at the fair

Option 3: 20% of all revenues generated at the fair.

The product sells for $150 per unit. She is able to purchase the units for $50.00 each.

70) How many actions and events exist in this situation?

70) ______ A) 3 actions and 6 events B) 2 actions and 3 events C) 6 actions and 6 events D) 1 action and 6 events E) 1 action and 3 events

71) Which option should Joan choose in order to maximize income assuming there is a 40% probability that 70 units will be sold and a 60% probability that 40 units will be sold?

71) ______ A) Option three with expected income of $3,640 B) Option two with expected income of $1,810 C) Option three with expected income of $4,060 D) Option two with expected income of $4,060 E) Option one with expected income of $1,200

**SHORT ANSWER.**

**Write the word or phrase that best completes each statement or answers the question. **72) Ben's Custom Golf sells special clubs. Ben is able to purchase equipment from a manufacturing company for $100 each. The equipment is sold for $150 each.

Required:

a.What is the breakeven units assuming Ben incurred $2,500 in selling expenses, and

there were no other expenses?

b.What would be the breakeven units assuming Ben incurred $2,500 in selling expenses and had $10,000 in other fixed expenses?

72)_____________

73) Gates Rubber Company sells cases of hydraulic hoses for $80. The unit variable costs per case are $40 plus a selling commission of 10 percent. Fixed manufacturing costs total $1,000 per month, while fixed selling and administrative costs total $2,000.

Required:

a.What is the contribution margin per case?

b.What is the breakeven point in cases?

c.How many cases must be sold to earn pretax income of $6,000?

73)_____________