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BSG Quiz 1 - Questions and Answers –
Latest 202 4 /202 5 (Verified Answers) 100%
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- Which of the following is not a factor that affects a company's credit rating? a) Debt-to-equity ratio b) Interest coverage ratio c) Return on equity d) Product quality A company's credit rating is based on its financial leverage and ability to meet interest obligations, not product quality.
- Which geographic region is the largest market for branded footwear sales? a) Africa b) North America c) Asia-Pacific d) Latin America North America traditionally has the largest market for branded athletic footwear in the BSG.
- Which of the following will increase the S/Q (Styling/Quality) rating of a company’s branded footwear? a) Increasing expenditures for TQM/Six Sigma programs b) Increasing the warranty period
c) Increasing the delivery time d) Reducing the advertising budget Higher spending on TQM/Six Sigma improves product quality and styling ratings.
- What is the main advantage of outsourcing production to independent suppliers? a) Lower wages for managers b) Lower production costs c) Improved brand image d) Higher tariffs Outsourcing helps reduce labor costs, especially in low-wage regions.
- Which cost is included in the calculation of total production cost per pair? a) Administrative salaries b) Raw materials and labor costs c) Loan interest payments d) Marketing expenses Production cost includes direct costs like materials and labor.
- Which factor directly affects internet marketing sales? a) Delivery time b) Retail store displays c) Search engine advertising d) Celebrity endorsements Online sales are boosted by internet-focused advertising like search engine ads.
c) Selling bonds d) Retained earnings Lines of credit are used to cover immediate, short-term cash needs. 11.The purpose of offering discounts to retailers is to: a) Decrease production b) Reduce demand c) Increase retailer orders d) Lower delivery costs Discounts incentivize retailers to order larger quantities. 12.A high price for branded footwear is most sustainable when: a) Tariffs are low b) S/Q rating is high c) Labor costs are low d) Interest rates are low Customers are willing to pay a premium for higher styling and quality. 13.Which of the following would reduce warehouse inventory levels? a) Increasing production b) Improving sales forecasting accuracy c) Extending lead times d) Increasing delivery times Better forecasting aligns production with demand, lowering excess inventory. 14.Which strategy would reduce per-unit shipping costs? a) Shipping in larger quantities
b) Using faster air freight c) Lowering tariffs d) Reducing warehouse space Bulk shipping benefits from economies of scale. 15.Which department manages decisions on celebrity endorsements? a) Operations b) Marketing c) Finance d) Human Resources Celebrity endorsements are a marketing expense. 16.Which option helps increase plant capacity? a) Closing plants b) Laying off workers c) Purchasing new equipment d) Reducing wages Adding equipment expands production capacity. 17.Which is NOT a factor in determining the price competitiveness of private- label shoes? a) Exchange rates b) Celebrity endorsements c) Delivery costs d) Production cost per pair Private-label shoes are sold unbranded; celebrity endorsements don’t apply.
22.Which action would increase a company’s interest expenses? a) Repurchasing shares b) Borrowing more funds c) Cutting dividends d) Issuing new shares More borrowing increases interest obligations. 23.Which strategy helps reduce warranty claim costs? a) Lower prices b) Higher delivery times c) Investing in TQM/Six Sigma d) Increasing warehouse space Better quality reduces defects, minimizing warranty claims. 24.Which component is included in administrative expenses? a) Factory rent b) Executive salaries c) Raw materials d) Advertising fees Executive salaries fall under administrative costs. 25.Which factor affects total compensation costs for workers? a) Tariffs b) Exchange rates c) Piecework incentives d) Delivery times Incentive pay adds to total labor costs.
26.Which region often has the lowest labor costs? a) Asia-Pacific b) Latin America c) Europe-Africa d) North America Asia-Pacific is generally known for low-cost labor options. 27.Which option would help increase worker productivity? a) Lowering wages b) Longer hours c) Better training programs d) Higher tariffs Training boosts efficiency and output. 28.What is the benefit of repurchasing company shares? a) Reduces debt b) Increases EPS c) Lowers taxes d) Improves plant efficiency Share buybacks reduce outstanding shares, raising earnings per share. 29.Which measure is best to increase ROE? a) Increase net profit b) Increase debt c) Lower S/Q rating d) Cut TQM costs Higher net income raises return on equity.
d) Improved cash flow More debt means higher required interest payments. 34.Which of these would directly impact net profit? a) Production cost changes b) CEO vacation days c) Stock split d) Changing currency codes Lower production costs increase profit margins. 35.Which expense is variable? a) Factory rent b) Equipment lease c) Raw materials cost d) Executive salaries Raw materials vary with production volume. 36.Which is NOT a source of new equity capital? a) IPO b) Retained earnings c) Private placement d) Additional public offering Retained earnings are internally generated, not raised from new investors. 37.Which region generally has the highest shipping cost? a) Asia-Pacific b) Latin America
c) North America d) Europe-Africa Latin America often incurs higher transportation costs in the BSG. 38.What does TQM stand for? a) Total Quality Management b) Total Quality Management c) Technical Quality Model d) Total Quantity Management The correct answer is Total Quality Management. 39.Which factor affects demand for private-label shoes? a) Celebrity endorsements b) Price offered c) S/Q rating d) Plant capacity Private-label sales are price-driven; branding doesn’t apply. 40.Which ratio measures profitability? a) Debt-to-equity ratio b) Current ratio c) Quick ratio d) Net profit margin Net profit margin shows how much profit is made on sales. 41.What is the main reason to use hedging? a) Increase production b) Reduce exchange rate risk
c) Advertising budget d) Warehouse rent ROE is net income divided by average shareholders’ equity. 46.The main purpose of benchmarking is to: a) Lower wages b) Compare performance with competitors c) Increase tariffs d) Raise interest rates Benchmarking identifies competitive gaps. 47.Which decision affects corporate social responsibility scores? a) Closing plants b) Environmental programs c) Reducing quality d) Delaying shipments CSR scores improve with sustainability initiatives. 48.Which statement shows total assets? a) Income statement b) Statement of retained earnings c) Cash flow statement d) Balance sheet The balance sheet shows total assets, liabilities, and equity. 49.What does EPS stand for? a) Earnings per Sales b) Earnings Price Spread
c) Earnings per Share d) Equity Price Summary EPS means Earnings per Share. 50.Which best describes the BSG game? a) A test for accounting skills b) A study of marketing only c) A business simulation for strategic management d) An inventory control system The BSG is a competitive business simulation to practice strategic management. 51.Which of these actions would most likely increase a company’s delivery time? a) Expanding capacity b) Increasing production efficiency c) Reducing overtime hours d) Investing in faster logistics Reducing overtime slows production output, which can delay shipments. 52.Which measure would directly increase the company’s plant utilization rate? a) Increasing production volume b) Hiring more managers c) Reducing warranty costs d) Buying back shares
c) Increase delivery times d) Raise warranty costs Local production avoids or reduces import tariffs. 57.Which factor affects a company’s credit rating? a) S/Q rating b) Debt-to-equity ratio c) Market share d) Number of retailers A higher debt load increases credit risk, affecting the rating. 58.What does a higher interest coverage ratio indicate? a) Lower ROE b) Higher production cost c) Stronger ability to pay interest d) Weak profit margin It shows earnings are sufficient to cover interest obligations. 59.Which strategy would most likely boost internet sales? a) Lowering S/Q rating b) Cutting celebrity endorsements c) Increasing online search ads d) Raising plant depreciation Online advertising directly targets internet shoppers. 60.Which cost is NOT variable? a) Executive salaries b) Raw materials
c) Labor wages (piecework) d) Shipping costs Executive salaries do not change with production levels. 61.Which is true about private-label sales? a) They require high S/Q ratings b) They focus mainly on low cost c) They use celebrity endorsements d) They have high brand loyalty Private-label is about cost leadership and bulk orders for retailers. 62.Which action would increase the cost of warranty claims? a) Investing in TQM b) Improving worker training c) Reducing quality control inspections d) Raising S/Q rating Less QC means more defective products, increasing warranty claims. 63.Which statement is true about gross profit? a) It includes operating expenses b) It excludes production costs c) It’s the same as net income d) It’s sales revenue minus COGS Gross profit = sales revenue – cost of goods sold. 64.Which is a benefit of high S/Q ratings? a) Higher defect rates b) Ability to charge premium prices
c) Net income and number of shares d) S/Q rating EPS = Net income ÷ Shares outstanding. 69.Which region is generally cheapest for new plant construction? a) Europe-Africa b) North America c) Latin America d) Asia-Pacific Asia-Pacific usually offers lower construction and labor costs. 70.Which factor affects import tariffs paid? a) Location of production b) Executive pay c) Interest coverage d) Advertising budget Producing locally avoids import tariffs. 71.Which financial statement shows cash from operations? a) Balance sheet b) Statement of retained earnings c) Income statement d) Cash flow statement The cash flow statement breaks down operating, investing, and financing cash flows. 72.Which decision would decrease annual depreciation expense? a) Building new plants
b) Selling equipment c) Adding worker incentives d) Increasing marketing Selling assets lowers depreciation since there’s less equipment to depreciate. 73.Which factor affects gross profit margin? a) Interest expense b) Executive salaries c) Cost of goods sold d) Dividends paid Gross profit margin = (Sales – COGS) / Sales. 74.Which measure helps manage excess capacity? a) Reducing wages b) Lowering warranty claims c) Selling plant capacity d) Increasing admin expenses Selling capacity reduces fixed costs of unused equipment. 75.Which of these is true about the TQM/Six Sigma program? a) Raises labor costs but not quality b) Reduces training costs c) Helps lower defect rates d) Increases shipping costs Investing in quality programs decreases defects and warranty issues.
