QUESTION: 25

For the past year a manufacturing company has recorded the number of units produced (x) each week and the total production cost (y) for that week. The company intends to use this data to predict future costs.

For the circumstance described above, linear regression is more useful and accurate than the high-low method because:

1. It uses all the sets of data observed to calculate the line of best fit.

2. The coefficient of variation can estimate what percentage of x is due to a change in y.

3. Forecasts remain valid for values for x outside of the observed range.

Which of the above statements are true?

1 only
1 and 2
2 and 3
3 only

Answer(s): A

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QUESTION: 26

Which of the following managers is most likely to be responsible for an favourable labour efficiency variance?

Production Manager
Purchasing Manager
Human Resources Manager
Marketing Manager

Answer(s): A

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QUESTION: 27

Which THREE of the following statements relating to fixed overhead variances are correct?

The total fixed overhead cost variance in an absorption costing system is the amount of fixed overhead that has been under- or over-absorbed in the period.
The total fixed overhead variance is made up of the fixed overhead expenditure variance, the fixed overhead efficiency variance and the fixed overhead capacity variance.
The fixed overhead volume variance can be split into the fixed overhead efficiency variance and the fixed overhead capacity variance.
The total fixed overhead cost variance in an absorption costing system is the difference between budgeted fixed overhead and actual fixed overhead incurred.
In a marginal costing operating statement reconciling budgeted contribution to actual profit only the fixed overhead expenditure variance and the fixed overhead volume variance are shown.

Answer(s): A,B,C

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QUESTION: 28

CORRECT TEXT
JKI is planning a golfing holiday for a group of wealthy lawyers.

The lawyers will fly to the local airport at their own expense. JKI will then pay for transport, accommodation and the use of the golf course (green fees).

JKI's costings are as follows, based on 28 participants:

JKI received 46 applications from potential participants.

What would the profit be if JKI accepted all of these bookings?

Give your answer to the nearest whole number.

$95800
$98000

Answer(s): A

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QUESTION: 25

QUESTION: 26

QUESTION: 27

QUESTION: 28