PRACTICE QUESTIONS DETAILED
SOLUTIONS
◉ Which of the following ARE components of the compensation
package for members of production assembly teams? Answer: The
dollar-cost of a PAT member's fringe benefit package, assembly quality
incentives ($ per unit assembled divided equally among PAT members),
year-end bonus for perfect attendance, and annual base wage
◉ The factors that affect the productivity of both camera PATs and
drone PATs include Answer: the size of assembly quality incentives
paid to camera/drone PATs, how favorably the overall size of the
company's total compensation package (not including overtime pay) per
camera/drone PAT member compares against the camera/drone all-
company averages, and changes in the number of camera/drone models
that have to be assembled.
◉ The company's present assembly plant has sufficient space for
Answer: up to 150 workstations, without expanding the size of the plant.
◉ A camera-maker's price competitiveness in a particular geographic
region is determined by Answer: whether its price is above or below the
average price of all companies competing in that geographic region.
, ◉ The interest rate a company pays on loans outstanding depends on
Answer: its credit rating.
◉ Which the following are not factors in determining a company's credit
rating? Answer: The size of the company's year-end cash balance, the
average of its ROE for the past three years, and how many times the
company has been put on credit watch.
◉ Consumer purchases of digital cameras are seasonal with Answer:
about 20% of consumer demand coming in quarter 1, 20% in quarter 2,
20% in quarter 3 and 40% in quarter 4.
◉ Which of the following are the four geographic regions in which the
company is selling its cameras? Answer: Europe-Africa, Latin America,
Asia-Pacific, and North America.
◉ Which of the following currencies are involved in affecting the
revenues your company receives on camera shipments to retailers in the
four geographic regions of the world where it markets cameras? Answer:
U.S. dollars, Taiwan dollars, Singapore dollars, euros, and Brazilian
real.
◉ Which of the following do not have a bearing in determining a
company's unit sales and market share of entry-level or multi-featured
cameras in a particular geographic region? Answer: The size of the
incentive bonus paid to PATs, the percentage of cameras that were
outsourced, and warranty claims costs.