Multiple choice

Question 1 

Which of the following is NOT true regarding bottom-up budgeting? 

A. The method tends to be inaccurate in the detailed tasks. 

B. The WBS is used to identify the elemental tasks. 

C. It is rarely used. 

D. It is a good managerial training technique. 

Question 2  

A task is expected to take 20 hours of labor at $25 per hour. The required material cost is $500, and the organization charges 30% of direct labor for overhead. The total task cost is: 

A. $500 

B. $1,150 

C. $1,250 

D. $1,500 

Question 3 

There is a 30 percent chance that a new product development project will result in sales of $500,000 and a 70 percent chance that the project will result in sales of $100,000. What is the expected value of this project? 

A. $220,000 

B. $240,000 

C. $300,000 

D. $320,000 

Question 4  

Which of the following is most closely associated with FMEA? 

A. Risk priority number 

B. Game theory 

C. Expected value 

D. Simulation