Decision-Making MCQs

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on November 16, 2021

Test your knowledge with this multiple choice question (MCQ) test on decision-making. If you can answer every question correctly, it will be great preparation for your exams, interviews, and professional work. To begin, simply answer the questions below.

1. Which one of the following statements is false?

2. Which one of the following can be described as data that are pertinent to a decision?

3. One of Anil Company's products has a contribution margin of $50,000 and fixed costs totaling $60,000. If the product is dropped, $40,000 of the fixed costs will continue unchanged. As a result of dropping the product, what will happen to the company's operating income?

4. Company B produces 2,000 parts each year that are used in one of its products. The unit cost of producing this part is $7.50 variable cost and $6.00 fixed cost. The part can be purchased from an outside supplier at $10 per unit. If the part is purchased from the outside supplier, two-thirds of the fixed costs incurred in producing the part can be eliminated. The effect on operating income from purchasing the part would be a:


 


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True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.

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