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Questions came word by
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BA2 Questions and Answers

Question # 1

A project is about to be launched. Two of the three possible outcomes and their associated probabilities are as follows:

The remaining possible outcome is a $70,000 gain.

What is the correct calculation of the expected value of the project?

A.

($30,000 + $70,000 - $25,000) / 3

B.

($30,000 + $70,000 - $25,000) x (0.7 + (1.0 - (0.2 + 0.7)) + 0.2)

C.

($30,000 x 0.7) + ($70,000 x (1.0 - (0.2 + 0.7))) + ($25,000 x 0.2)

D.

($30,000 x 0.7) + ($70,000 x (1.0 - (0.2 + 0.7))) - ($25,000 x 0.2)

Question # 2

The following data are available for a delivery company. The table shows the number of tonnes delivered (x) and the associated distribution cist (y) in recent periods.

Further analysis of this data has determined the following:

∑xy = 36,427∑x2 = 1,144

Using least squares regression analysis, calculate the variable cost per tonne delivered. Give your answer to the nearest cent.

Question # 3

In a company that manufactures many different products on the same production line, which TWO of the following would NOT be classified as indirect production costs? (Choose two.)

A.

Salary paid to the factory manager.

B.

Factory rent.

C.

Maintenance costs for the company’s only production line.

D.

Commissions paid to the sales team.

E.

Royalties paid to the designers of the products.

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