ETS MFT BUSINESS EXAM 2026 ACTUAL PAPER
SOLVED QUESTIONS VERIFIED A+
◉ In organizational decision making, managers are able to exercise the
greatest degree of discretion in the
a) enforcement of internal policies
b) settlement of legal disputes
c) restructuring of outstanding loans
d) compliance with federal regulations. Answer: a) enforcement of
internal policies
◉ The term "net working capital" refers to
(A) inventories, receivables, and current notes and investments
(B) assets divided by liabilities
(C) current assets less short-term liabilities
(D) net assets left over after subtracting cost of goods sold. Answer: (C)
current assets less short-term liabilities
◉ Dreamland Pillow Company sells the "Old Softy" model for $20
each. One pillow requires two pounds of raw material and one hour of
direct labor to manufacture.
,Raw material costs $3 per pound and direct production labor is paid $4
per hour. Fixed supervisory costs are $2,000 per month and Dreamland
rents its factory on a five-year lease for $4,000 per month. All costs are
considered costs of production.
How many pillows must Dreamland produce and sell each month to earn
a monthly gross profit of $1,000?
(A) 300
(B) 350
(C) 600
(D) 700. Answer: (D) 700
VC = (2 lbs*$3)+$4 = $10
FC = $2,000+$4,000 = $6,000
CM per unit = $20-(VC) $10=$10
$1,000 = (units sold*$10)-$6,000
Units sold = ($1,000+$6,000)/$10 = 700 pillows
◉ Dreamland Pillow Company sells the "Old Softy" model for $20
each. One pillow requires two pounds of raw material and one hour of
direct labor to manufacture.
,Raw material costs $3 per pound and direct production labor is paid $4
per hour. Fixed supervisory costs are $2,000 per month and Dreamland
rents its factory on a five-year lease for $4,000 per month. All costs are
considered costs of production.
Another firm has offered to produce "Old Softy" pillows and sell them to
Dreamland for $12 each. Dreamland cannot avoid the factory lease
payments, but can avoid all labor costs if it does not produce these
pillows. Under these conditions, how many "Old Softy" pillows must
Dreamland sell to earn monthly gross profits of $1,000?
(A) 417
(B) 500
(C) 625
(D) 875. Answer: (C) 625
Dreamland VC per unit = $12
FC = $4,000
CM per unit = $20-(VC) $12=$8
(GP) $1,000 = (units sold*$8)-$4,000
Units sold = ($1,000+$4,000)/$8 = 625 pillows
◉ Which of the following statements about a systems flowchart is true?
, (A) It is used in systems design to define and describe each piece of
data.
(B) It is a method of writing programs using only three basic constructs:
sequence, selection, and repetition.
(C) It documents the sequence of processing steps that take place in an
information system.
(D) It documents the logical design of an information system.. Answer:
(D) It documents the logical design of an information system.
◉ Which of the following statements about the tort of negligence is
true?
(A) It cannot be used as a basis for liability for defective products.
(B) It is a strict liability tort with no defenses.
(C) It requires proof of some intentional conduct.
(D) It requires proof of breach of a statutory or common-law duty..
Answer: (C) It requires proof of some intentional conduct.
◉ On May 31, Company O's general ledger shows a cash balance of
$5,123. The May 31 bank statement shows a balance of $4,905. Other
information is available as follows:
SOLVED QUESTIONS VERIFIED A+
◉ In organizational decision making, managers are able to exercise the
greatest degree of discretion in the
a) enforcement of internal policies
b) settlement of legal disputes
c) restructuring of outstanding loans
d) compliance with federal regulations. Answer: a) enforcement of
internal policies
◉ The term "net working capital" refers to
(A) inventories, receivables, and current notes and investments
(B) assets divided by liabilities
(C) current assets less short-term liabilities
(D) net assets left over after subtracting cost of goods sold. Answer: (C)
current assets less short-term liabilities
◉ Dreamland Pillow Company sells the "Old Softy" model for $20
each. One pillow requires two pounds of raw material and one hour of
direct labor to manufacture.
,Raw material costs $3 per pound and direct production labor is paid $4
per hour. Fixed supervisory costs are $2,000 per month and Dreamland
rents its factory on a five-year lease for $4,000 per month. All costs are
considered costs of production.
How many pillows must Dreamland produce and sell each month to earn
a monthly gross profit of $1,000?
(A) 300
(B) 350
(C) 600
(D) 700. Answer: (D) 700
VC = (2 lbs*$3)+$4 = $10
FC = $2,000+$4,000 = $6,000
CM per unit = $20-(VC) $10=$10
$1,000 = (units sold*$10)-$6,000
Units sold = ($1,000+$6,000)/$10 = 700 pillows
◉ Dreamland Pillow Company sells the "Old Softy" model for $20
each. One pillow requires two pounds of raw material and one hour of
direct labor to manufacture.
,Raw material costs $3 per pound and direct production labor is paid $4
per hour. Fixed supervisory costs are $2,000 per month and Dreamland
rents its factory on a five-year lease for $4,000 per month. All costs are
considered costs of production.
Another firm has offered to produce "Old Softy" pillows and sell them to
Dreamland for $12 each. Dreamland cannot avoid the factory lease
payments, but can avoid all labor costs if it does not produce these
pillows. Under these conditions, how many "Old Softy" pillows must
Dreamland sell to earn monthly gross profits of $1,000?
(A) 417
(B) 500
(C) 625
(D) 875. Answer: (C) 625
Dreamland VC per unit = $12
FC = $4,000
CM per unit = $20-(VC) $12=$8
(GP) $1,000 = (units sold*$8)-$4,000
Units sold = ($1,000+$4,000)/$8 = 625 pillows
◉ Which of the following statements about a systems flowchart is true?
, (A) It is used in systems design to define and describe each piece of
data.
(B) It is a method of writing programs using only three basic constructs:
sequence, selection, and repetition.
(C) It documents the sequence of processing steps that take place in an
information system.
(D) It documents the logical design of an information system.. Answer:
(D) It documents the logical design of an information system.
◉ Which of the following statements about the tort of negligence is
true?
(A) It cannot be used as a basis for liability for defective products.
(B) It is a strict liability tort with no defenses.
(C) It requires proof of some intentional conduct.
(D) It requires proof of breach of a statutory or common-law duty..
Answer: (C) It requires proof of some intentional conduct.
◉ On May 31, Company O's general ledger shows a cash balance of
$5,123. The May 31 bank statement shows a balance of $4,905. Other
information is available as follows:
