ETS MAJOR FIELD TEST (ANSWERED TEST): BACHELOR'S DEGREE IN
BUSINESS.| 2025 LATEST UPDATED | 100% CORRECT!!
Question 1
In marketing research, a firm might consider using secondary data over primary data primarily
because:
A) Secondary data are usually more accurate and up-to-date.
B) Secondary data provide information tailored specifically to the research question.
C) Secondary data usually cost less and can be obtained more quickly.
D) Primary data are likely to be non-specific and lack objectivity.
E) Secondary data are only available from government sources.
Correct Answer: C) Secondary data usually cost less and can be obtained more quickly.
Rationale: Secondary data is information that has already been collected for another
purpose. Because the data collection process is complete, acquiring existing secondary data
requires minimal expense, often involving only a subscription or database fee, and can be
accessed almost immediately, offering significant advantages in both cost and speed over
collecting new, proprietary primary data.
Question 2
In organizational decision making, managers are able to exercise the greatest degree of discretion
in the:
A) Enforcement of internal policies.
B) Compliance with federal regulations.
C) Settlement of complex legal disputes.
D) Restructuring of outstanding loans with external creditors.
E) Management of legally binding labor contracts.
Correct Answer: A) Enforcement of internal policies.
Rationale: Managerial discretion, or the freedom to decide or act, is greatest in the realm of
internal policies. Areas like federal regulations, legal disputes, and external contracts are
governed by rigid, external rules that limit managerial autonomy, whereas internal policies
often grant managers flexibility in interpretation, application, and exception-making.
,Question 3
The term "net working capital" refers to:
A) Inventories, accounts receivable, 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.
E) Total current assets used to pay long-term debt.
Correct Answer: C) Current assets less short-term liabilities
Rationale: Net working capital is a key financial metric used to evaluate a company's short-
term liquidity and operational efficiency. It represents the capital remaining after a firm
covers its current obligations (short-term liabilities) with its current, easily convertible
resources (current assets), indicating its ability to meet near-term debts.
Question 4
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 for $4,000 per month. How many pillows must
Dreamland produce and sell each month to earn a monthly gross profit of
1,000? 𝐴)300𝐵)350𝐶)600𝐷)700𝐸)800𝐶𝑜𝑟𝑟𝑒𝑐𝑡𝐴𝑛𝑠𝑤𝑒𝑟: 𝐷) ∗∗ 700 ∗∗ 𝑅𝑎𝑡𝑖𝑜𝑛𝑎𝑙𝑒:∗
∗ 𝑇ℎ𝑖𝑠𝑖𝑠𝑎𝐶𝑜𝑠𝑡 − 𝑉𝑜𝑙𝑢𝑚𝑒
− 𝑃𝑟𝑜𝑓𝑖𝑡(𝐶𝑉𝑃)𝑎𝑛𝑎𝑙𝑦𝑠𝑖𝑠𝑝𝑟𝑜𝑏𝑙𝑒𝑚. 𝑇ℎ𝑒𝑔𝑜𝑎𝑙𝑖𝑠𝑡𝑜𝑠𝑜𝑙𝑣𝑒𝑓𝑜𝑟𝑡ℎ𝑒𝑡𝑎𝑟𝑔𝑒𝑡𝑠𝑎𝑙𝑒𝑠𝑣𝑜𝑙𝑢𝑚𝑒(
S$). The calculation is:
𝑆 = (𝐹𝑖𝑥𝑒𝑑𝐶𝑜𝑠𝑡𝑠 + 𝑇𝑎𝑟𝑔𝑒𝑡𝑃𝑟𝑜𝑓𝑖𝑡)/𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑀𝑎𝑟𝑔𝑖𝑛𝑝𝑒𝑟𝑈𝑛𝑖𝑡
. Variable Cost (VC) per unit = (2 lbs * $3/lb) + $4/hr = $10. Fixed Costs (FC) = $2,000 +
$4,000 = $6,000. Contribution Margin (CM) per unit = Selling Price - VC = $20 - $10 =
10. 𝑈𝑛𝑖𝑡𝑠𝑆𝑜𝑙𝑑 = (
6,000 + $1,000) / $10 = 700 pillows.**
Question 5
Dreamland Pillow Company sells the "Old Softy" model for $20 each. Raw material is $6 and
,direct labor is $4 per unit. Fixed supervisory costs are $2,000 per month, and the factory lease is
$4,000 per month. Another firm offers to produce the pillows for $12 each. If Dreamland
outsources, it avoids labor costs but cannot avoid the factory lease. Fixed supervisory costs are
avoided if outsourced. How many "Old Softy" pillows must Dreamland sell to earn a monthly
gross profit of $1,000 under these outsourcing conditions?
A) 417
B) 500
C) 625
D) 875
E) 1,000
Correct Answer: C) 625
Rationale: The decision is analyzed by recalculating CVP under outsourcing. New Variable
Cost (VC) per unit = Outsourcing cost = $12. New Fixed Costs (FC) = Lease cost
(unavoidable) = $4,000 (Supervisory costs are avoided). New Contribution Margin (CM)
per unit = Selling Price - New VC = $20 - $12 =
8. 𝑈𝑛𝑖𝑡𝑠𝑆𝑜𝑙𝑑 = (𝑁𝑒𝑤𝐹𝐶 + 𝑇𝑎𝑟𝑔𝑒𝑡𝑃𝑟𝑜𝑓𝑖𝑡)/𝑁𝑒𝑤𝐶𝑀𝑝𝑒𝑟𝑈𝑛𝑖𝑡 = (
4,000 + $1,000) / $8 = 625 pillows.
Question 6
Which of the following statements about a systems flowchart is true?
A) It is used in systems design to define and describe the structure of a database.
B) It is a method of writing programs using only three basic constructs.
C) It documents the sequence of processing steps that take place in an information system at a
physical level.
D) It documents the logical design of an information system.
E) It is a text-based tool used only by programmers.
Correct Answer: D) It documents the logical design of an information system.
Rationale: A systems flowchart is a visual tool used in Information Systems to represent the
overall, logical flow of data, processes, and controls within a business process or system. It
documents what the system does and how the data moves, focusing on the logic and
function rather than the physical equipment or specific programming code.
, Question 7
Which of the following statements is true regarding the tort of negligence?
A) It is a strict liability tort, meaning proof of intent or fault is unnecessary.
B) It requires proof of an intentional act to harm another party.
C) It requires proof of the breach of a statutory or common-law duty of care.
D) It cannot be used as a basis for liability in cases involving defective products.
E) It is exclusively governed by federal statutes.
Correct Answer: C) It requires proof of the breach of a statutory or common-law duty of
care.
Rationale: The tort of negligence has four core elements: duty of care, breach of that duty,
causation, and damages. Proving that the defendant failed to exercise reasonable care
(breach of duty) is essential to establishing liability, as negligence is based on carelessness,
not intentional harm (which is incorrect in the provided fragment, but this rationale
provides the correct legal context for negligence).
Question 8
In finance, the term used to describe the annual rate of return earned on a bond if it is held until
its maturity date is the:
A) Coupon Rate
B) Current Yield
C) Yield to Maturity (YTM)
D) Required Rate of Return
E) Prime Rate
Correct Answer: C) Yield to Maturity (YTM)
Rationale: Yield to Maturity (YTM) is the internal rate of return (IRR) of an investment in
a bond, assuming the investor holds the bond until its maturity date and all payments are
made as scheduled. It is considered the most comprehensive single measure of a bond's
return.
Question 9
An accounting principle requires that all expenses incurred to generate a specific revenue must
be recorded in the same accounting period as that revenue. This principle is known as the:
BUSINESS.| 2025 LATEST UPDATED | 100% CORRECT!!
Question 1
In marketing research, a firm might consider using secondary data over primary data primarily
because:
A) Secondary data are usually more accurate and up-to-date.
B) Secondary data provide information tailored specifically to the research question.
C) Secondary data usually cost less and can be obtained more quickly.
D) Primary data are likely to be non-specific and lack objectivity.
E) Secondary data are only available from government sources.
Correct Answer: C) Secondary data usually cost less and can be obtained more quickly.
Rationale: Secondary data is information that has already been collected for another
purpose. Because the data collection process is complete, acquiring existing secondary data
requires minimal expense, often involving only a subscription or database fee, and can be
accessed almost immediately, offering significant advantages in both cost and speed over
collecting new, proprietary primary data.
Question 2
In organizational decision making, managers are able to exercise the greatest degree of discretion
in the:
A) Enforcement of internal policies.
B) Compliance with federal regulations.
C) Settlement of complex legal disputes.
D) Restructuring of outstanding loans with external creditors.
E) Management of legally binding labor contracts.
Correct Answer: A) Enforcement of internal policies.
Rationale: Managerial discretion, or the freedom to decide or act, is greatest in the realm of
internal policies. Areas like federal regulations, legal disputes, and external contracts are
governed by rigid, external rules that limit managerial autonomy, whereas internal policies
often grant managers flexibility in interpretation, application, and exception-making.
,Question 3
The term "net working capital" refers to:
A) Inventories, accounts receivable, 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.
E) Total current assets used to pay long-term debt.
Correct Answer: C) Current assets less short-term liabilities
Rationale: Net working capital is a key financial metric used to evaluate a company's short-
term liquidity and operational efficiency. It represents the capital remaining after a firm
covers its current obligations (short-term liabilities) with its current, easily convertible
resources (current assets), indicating its ability to meet near-term debts.
Question 4
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 for $4,000 per month. How many pillows must
Dreamland produce and sell each month to earn a monthly gross profit of
1,000? 𝐴)300𝐵)350𝐶)600𝐷)700𝐸)800𝐶𝑜𝑟𝑟𝑒𝑐𝑡𝐴𝑛𝑠𝑤𝑒𝑟: 𝐷) ∗∗ 700 ∗∗ 𝑅𝑎𝑡𝑖𝑜𝑛𝑎𝑙𝑒:∗
∗ 𝑇ℎ𝑖𝑠𝑖𝑠𝑎𝐶𝑜𝑠𝑡 − 𝑉𝑜𝑙𝑢𝑚𝑒
− 𝑃𝑟𝑜𝑓𝑖𝑡(𝐶𝑉𝑃)𝑎𝑛𝑎𝑙𝑦𝑠𝑖𝑠𝑝𝑟𝑜𝑏𝑙𝑒𝑚. 𝑇ℎ𝑒𝑔𝑜𝑎𝑙𝑖𝑠𝑡𝑜𝑠𝑜𝑙𝑣𝑒𝑓𝑜𝑟𝑡ℎ𝑒𝑡𝑎𝑟𝑔𝑒𝑡𝑠𝑎𝑙𝑒𝑠𝑣𝑜𝑙𝑢𝑚𝑒(
S$). The calculation is:
𝑆 = (𝐹𝑖𝑥𝑒𝑑𝐶𝑜𝑠𝑡𝑠 + 𝑇𝑎𝑟𝑔𝑒𝑡𝑃𝑟𝑜𝑓𝑖𝑡)/𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑀𝑎𝑟𝑔𝑖𝑛𝑝𝑒𝑟𝑈𝑛𝑖𝑡
. Variable Cost (VC) per unit = (2 lbs * $3/lb) + $4/hr = $10. Fixed Costs (FC) = $2,000 +
$4,000 = $6,000. Contribution Margin (CM) per unit = Selling Price - VC = $20 - $10 =
10. 𝑈𝑛𝑖𝑡𝑠𝑆𝑜𝑙𝑑 = (
6,000 + $1,000) / $10 = 700 pillows.**
Question 5
Dreamland Pillow Company sells the "Old Softy" model for $20 each. Raw material is $6 and
,direct labor is $4 per unit. Fixed supervisory costs are $2,000 per month, and the factory lease is
$4,000 per month. Another firm offers to produce the pillows for $12 each. If Dreamland
outsources, it avoids labor costs but cannot avoid the factory lease. Fixed supervisory costs are
avoided if outsourced. How many "Old Softy" pillows must Dreamland sell to earn a monthly
gross profit of $1,000 under these outsourcing conditions?
A) 417
B) 500
C) 625
D) 875
E) 1,000
Correct Answer: C) 625
Rationale: The decision is analyzed by recalculating CVP under outsourcing. New Variable
Cost (VC) per unit = Outsourcing cost = $12. New Fixed Costs (FC) = Lease cost
(unavoidable) = $4,000 (Supervisory costs are avoided). New Contribution Margin (CM)
per unit = Selling Price - New VC = $20 - $12 =
8. 𝑈𝑛𝑖𝑡𝑠𝑆𝑜𝑙𝑑 = (𝑁𝑒𝑤𝐹𝐶 + 𝑇𝑎𝑟𝑔𝑒𝑡𝑃𝑟𝑜𝑓𝑖𝑡)/𝑁𝑒𝑤𝐶𝑀𝑝𝑒𝑟𝑈𝑛𝑖𝑡 = (
4,000 + $1,000) / $8 = 625 pillows.
Question 6
Which of the following statements about a systems flowchart is true?
A) It is used in systems design to define and describe the structure of a database.
B) It is a method of writing programs using only three basic constructs.
C) It documents the sequence of processing steps that take place in an information system at a
physical level.
D) It documents the logical design of an information system.
E) It is a text-based tool used only by programmers.
Correct Answer: D) It documents the logical design of an information system.
Rationale: A systems flowchart is a visual tool used in Information Systems to represent the
overall, logical flow of data, processes, and controls within a business process or system. It
documents what the system does and how the data moves, focusing on the logic and
function rather than the physical equipment or specific programming code.
, Question 7
Which of the following statements is true regarding the tort of negligence?
A) It is a strict liability tort, meaning proof of intent or fault is unnecessary.
B) It requires proof of an intentional act to harm another party.
C) It requires proof of the breach of a statutory or common-law duty of care.
D) It cannot be used as a basis for liability in cases involving defective products.
E) It is exclusively governed by federal statutes.
Correct Answer: C) It requires proof of the breach of a statutory or common-law duty of
care.
Rationale: The tort of negligence has four core elements: duty of care, breach of that duty,
causation, and damages. Proving that the defendant failed to exercise reasonable care
(breach of duty) is essential to establishing liability, as negligence is based on carelessness,
not intentional harm (which is incorrect in the provided fragment, but this rationale
provides the correct legal context for negligence).
Question 8
In finance, the term used to describe the annual rate of return earned on a bond if it is held until
its maturity date is the:
A) Coupon Rate
B) Current Yield
C) Yield to Maturity (YTM)
D) Required Rate of Return
E) Prime Rate
Correct Answer: C) Yield to Maturity (YTM)
Rationale: Yield to Maturity (YTM) is the internal rate of return (IRR) of an investment in
a bond, assuming the investor holds the bond until its maturity date and all payments are
made as scheduled. It is considered the most comprehensive single measure of a bond's
return.
Question 9
An accounting principle requires that all expenses incurred to generate a specific revenue must
be recorded in the same accounting period as that revenue. This principle is known as the:
