COMP XM EXAM STUDY GUIDE 2026/2027
ACCURATE QUESTIONS WITH CORRECT
DETAILED SOLUTIONS ||
100% GUARANTEED PASS
<NEWEST VERSION>
1. High Tech R&D - ANSWER ✔ Update every round
2. TQM - ANSWER ✔ 1 million each category
3. Automation - ANSWER ✔ Buy as high as possible for Low Tech
High Tech under 4.0 automation
4. promo and sales - ANSWER ✔ invest 2000 each round, never go lower
than 1400
5. Human Resources - ANSWER ✔ 5,000 in spending
80 hours of training
6. Performance and Size - ANSWER ✔ Always have 19.7
Low tech: Size-Down .5% Performance- Up .5%
High Tech: Size down .7% Performance up .7%
7. Long Term debt - ANSWER ✔ Use for Plant and Equipment
improvements, automation, and capacity
8. Current Debt - ANSWER ✔ good for a little extra cash A productivity
index of 110% means that a company's labor costs would have been 10%
higher if it had not made production improvements. Now refer to the Income
Statement in Digby's Annual Report. The direct labor costs for Digby were
$32,486. These labor costs could have been $20,000 higher if investments in
training that increased productivity had not been made. What was the
, productivity index for Digby that led to such savings? - ANSWER ✔
161.6%
9. Investing $1,500,000 in TQM's Channel Support Systems initiative will at a
minimum increase demand for your products 1.7% in this and in all future
rounds. (Refer to the TQM Initiative worksheet in the CompXM Decisions
menu.) Looking at the Round 0 Inquirer for Andrews, last year's sales were
$163,189,230. Assuming similar sales next year, the 1.7% increase in
demand will provide $2,774,217 of additional revenue. With the overall
contribution margin of 34.1%, after direct costs this revenue will add
$946,008 to the bottom line. For simplicity, assume that the demand increase
and margins will remain at last year's levels. How long will it take to achieve
payback on the initial $1,500,000 TQM investment, rounded to the nearest
month? - ANSWER ✔ 9 months
10.Bam's product manager is under pressure to increase market share, but is
uncertain about how to make the product more competitive. The product is
reasonably well-positioned in the Thrift segment and enjoys relatively high
awareness and accessibility. Which of the following would most likely result
in a quick increase in market share? - ANSWER ✔ Lower the unit selling
price to the bottom limit of the segment price range
11.Looking forward to next year, if Baldwins current cash amount is $20,132
(000) and cash flows from operations next period are unchanged from this
period and Baldwin takes ONLY the following actions relating to cash flows
from investing and financing activities:
Issues $2,000 (000) of long-term debt
Pays $4,000 (000) in dividends
Retires $10,000 (000) in debt
Which of the following activities will expose Baldwin to the most risk of
needing an emergency loan? - ANSWER ✔ Purchases assets at a cost of
$15,000 (000)
,12.According to information found on the production analysis page of the
Inquirer, Chester sold 1126 units of Cat in the current year. Assuming that
Cat maintains a constant market share, all the units of Cat are sold in the
Nano market segment and the growth rate remains constant, how many years
will it be before Cat will not be able to meet future demand unless the
company adds production capacity? Exclude any existing inventory. -
ANSWER ✔ 1 year
13.Which description best fits Andrews? For clarity:
- A differentiator competes through good designs, high awareness, and
easy accessibility.
- A cost leader competes on price by reducing costs and passing the
savings to customers.
- A broad player competes in all parts of the market.
- *A niche player competes in selected parts of the market.* -
ANSWER ✔ Andrews is a niche differentiator
14.Digby's revenues were $118,965,138 last year. What percentage went to
their marketing budgets?
11.1% (SG&A/Revenue)
6.5% (Promo&Sales/Revenue)
3.2% (Promo/Revenue)
3.3% (Sales/Revenue) - ANSWER ✔ 6.5% (Promo&Sales/Revenue)
Correct! Go to Digby Company's Annual Report in the Inquirer. Turn to the
Income Statement. Find each products' promo and sales budgets and take the
sum of them. Then, take the total and divide it by Digby's total sales.
15.Consider the cost to separate (terminate) employees at $5,000 per worker
(severance pay, etc.). Consider the cost of training workers at $20 per hour.
Consider the cost of recruiting a higher caliber worker at $3,000. What
action would cost Andrews Company the most?
a) Firing a quarter of its workforce.
b) Paying their newly hired employees an additional $3,000.
, c) Training the entire workforce 40 hours per year. - ANSWER
✔ Firing a quarter of its workforce.
Correct! Find Andrews current workforce complement on Page 12 of the
Inquirer. The cost to fire a quarter of Andrews Company's workforce is .25 *
804 * $5,000 = $1,005,000. Next, find the number of new employees on the
same page. 140 new workers * $3,000 = $420,000. Then, find the current
workforce complement * $20 * 40 = $643,000. Therefore, it costs more to fire a
quarter of Andrews Company's workforce.
16.The closing price (street value) of your oldest bond is 1.0% above its face
value. That means if your company buys the bond back at street value:
You pay $101 for every $100 issued.
You pay $10 for every $100 issued.
You pay $99 for every $100 issued. - ANSWER ✔ You pay $101 for every
$100 issued.
Correct! Bonds are issued at a face value of $100. A 1% premium is calculated
1.01 * $100 = $101.
17.Which of the following does not appear on a balance sheet?
Accumulated Depreciation
Common Stock
Accounts Receivable
Retained Earnings
Profit Sharing - ANSWER ✔ Profit Sharing
Correct! Go to Page 3 of the Inquirer and find the Balance Sheet. Notice what
appears and what does not appear of the given answers. Profit sharing belongs
on the Income Statement.
18.Which of the following does not come after EBIT on the income statement?
Interest Expense
Profit Sharing
Net Profit
Taxes
Depreciation - ANSWER ✔ Depreciation
Correct! Go to Page 3 of the Inquirer and find the Income Statement. Note the
items that appear above EBIT, including Depreciation.
ACCURATE QUESTIONS WITH CORRECT
DETAILED SOLUTIONS ||
100% GUARANTEED PASS
<NEWEST VERSION>
1. High Tech R&D - ANSWER ✔ Update every round
2. TQM - ANSWER ✔ 1 million each category
3. Automation - ANSWER ✔ Buy as high as possible for Low Tech
High Tech under 4.0 automation
4. promo and sales - ANSWER ✔ invest 2000 each round, never go lower
than 1400
5. Human Resources - ANSWER ✔ 5,000 in spending
80 hours of training
6. Performance and Size - ANSWER ✔ Always have 19.7
Low tech: Size-Down .5% Performance- Up .5%
High Tech: Size down .7% Performance up .7%
7. Long Term debt - ANSWER ✔ Use for Plant and Equipment
improvements, automation, and capacity
8. Current Debt - ANSWER ✔ good for a little extra cash A productivity
index of 110% means that a company's labor costs would have been 10%
higher if it had not made production improvements. Now refer to the Income
Statement in Digby's Annual Report. The direct labor costs for Digby were
$32,486. These labor costs could have been $20,000 higher if investments in
training that increased productivity had not been made. What was the
, productivity index for Digby that led to such savings? - ANSWER ✔
161.6%
9. Investing $1,500,000 in TQM's Channel Support Systems initiative will at a
minimum increase demand for your products 1.7% in this and in all future
rounds. (Refer to the TQM Initiative worksheet in the CompXM Decisions
menu.) Looking at the Round 0 Inquirer for Andrews, last year's sales were
$163,189,230. Assuming similar sales next year, the 1.7% increase in
demand will provide $2,774,217 of additional revenue. With the overall
contribution margin of 34.1%, after direct costs this revenue will add
$946,008 to the bottom line. For simplicity, assume that the demand increase
and margins will remain at last year's levels. How long will it take to achieve
payback on the initial $1,500,000 TQM investment, rounded to the nearest
month? - ANSWER ✔ 9 months
10.Bam's product manager is under pressure to increase market share, but is
uncertain about how to make the product more competitive. The product is
reasonably well-positioned in the Thrift segment and enjoys relatively high
awareness and accessibility. Which of the following would most likely result
in a quick increase in market share? - ANSWER ✔ Lower the unit selling
price to the bottom limit of the segment price range
11.Looking forward to next year, if Baldwins current cash amount is $20,132
(000) and cash flows from operations next period are unchanged from this
period and Baldwin takes ONLY the following actions relating to cash flows
from investing and financing activities:
Issues $2,000 (000) of long-term debt
Pays $4,000 (000) in dividends
Retires $10,000 (000) in debt
Which of the following activities will expose Baldwin to the most risk of
needing an emergency loan? - ANSWER ✔ Purchases assets at a cost of
$15,000 (000)
,12.According to information found on the production analysis page of the
Inquirer, Chester sold 1126 units of Cat in the current year. Assuming that
Cat maintains a constant market share, all the units of Cat are sold in the
Nano market segment and the growth rate remains constant, how many years
will it be before Cat will not be able to meet future demand unless the
company adds production capacity? Exclude any existing inventory. -
ANSWER ✔ 1 year
13.Which description best fits Andrews? For clarity:
- A differentiator competes through good designs, high awareness, and
easy accessibility.
- A cost leader competes on price by reducing costs and passing the
savings to customers.
- A broad player competes in all parts of the market.
- *A niche player competes in selected parts of the market.* -
ANSWER ✔ Andrews is a niche differentiator
14.Digby's revenues were $118,965,138 last year. What percentage went to
their marketing budgets?
11.1% (SG&A/Revenue)
6.5% (Promo&Sales/Revenue)
3.2% (Promo/Revenue)
3.3% (Sales/Revenue) - ANSWER ✔ 6.5% (Promo&Sales/Revenue)
Correct! Go to Digby Company's Annual Report in the Inquirer. Turn to the
Income Statement. Find each products' promo and sales budgets and take the
sum of them. Then, take the total and divide it by Digby's total sales.
15.Consider the cost to separate (terminate) employees at $5,000 per worker
(severance pay, etc.). Consider the cost of training workers at $20 per hour.
Consider the cost of recruiting a higher caliber worker at $3,000. What
action would cost Andrews Company the most?
a) Firing a quarter of its workforce.
b) Paying their newly hired employees an additional $3,000.
, c) Training the entire workforce 40 hours per year. - ANSWER
✔ Firing a quarter of its workforce.
Correct! Find Andrews current workforce complement on Page 12 of the
Inquirer. The cost to fire a quarter of Andrews Company's workforce is .25 *
804 * $5,000 = $1,005,000. Next, find the number of new employees on the
same page. 140 new workers * $3,000 = $420,000. Then, find the current
workforce complement * $20 * 40 = $643,000. Therefore, it costs more to fire a
quarter of Andrews Company's workforce.
16.The closing price (street value) of your oldest bond is 1.0% above its face
value. That means if your company buys the bond back at street value:
You pay $101 for every $100 issued.
You pay $10 for every $100 issued.
You pay $99 for every $100 issued. - ANSWER ✔ You pay $101 for every
$100 issued.
Correct! Bonds are issued at a face value of $100. A 1% premium is calculated
1.01 * $100 = $101.
17.Which of the following does not appear on a balance sheet?
Accumulated Depreciation
Common Stock
Accounts Receivable
Retained Earnings
Profit Sharing - ANSWER ✔ Profit Sharing
Correct! Go to Page 3 of the Inquirer and find the Balance Sheet. Notice what
appears and what does not appear of the given answers. Profit sharing belongs
on the Income Statement.
18.Which of the following does not come after EBIT on the income statement?
Interest Expense
Profit Sharing
Net Profit
Taxes
Depreciation - ANSWER ✔ Depreciation
Correct! Go to Page 3 of the Inquirer and find the Income Statement. Note the
items that appear above EBIT, including Depreciation.
