1. Question : Regression analysis does not assume a

Student Answer:

linear relationship between the dependent and independent 

variables(s). 

normal distribution of the actual values (y) around the 

predicting equation (y'). 

constant variance for the independent error terms (e) from 

the predicting equation. 

logical and causal relationship between the dependent and 

independent variable(s). 

Student Answer:

$160,000 

$180,000 

$175,000 

$150,000 

Student Answer:

$1,000. 

$1,600. 

$2,000. 

$4,000. 

$5,000. 

4. Question : Which of the following statements regarding special orders is 

(are) true?

(A) The primary decision for special orders is determining 

whether the differential revenue is greater than the differential 

costs associated with the order.

(B) The differential analysis approach to pricing for special 

orders could lead to underpricing in the long-run because fixed 

costs are not included in the analysis.

Student Answer:

only A. 

only B. 

neither A nor B is false. 

both A and B are true. 

5. Question : A company is considering the use of a single-stage cost 

allocation process. Under what conditions would this choice be 

justified?

Student Answer:

The company has many service departments but only one 

production department. 

The company produces a few products with similar 

characteristics in a few departments. 

The company has no service departments but many 

production departments. 

The company produces a wide selection of products in a 

single production department. 

6. Question : The statistic used to determine if the total cost function is 

significantly different from the fixed cost function is the

Student Answer:

t-value of the b-coefficient. 

coefficient of determination. 

standard error of the estimate. 

coefficient of correlation. 

standard error of the a-coefficient. 

7. Question : The loan department of a financial corporation makes loans to 

businesses. The costs of processing these loans are often 

several thousand dollars. All loans are initially evaluated using 

the same financial analysis software, but some require outside 

services such as appraisals and legal services. Which is the most 

appropriate costing system for the loan department?

Student Answer:

job-order costing 

process costing 

operation costing 

batch costing 

8. Question : Mount Company incurred a total cost of $8,600 to produce 400 

units of pulp. Each unit of pulp required five (5) direct labor 

hours to complete. What is the total fixed cost if the variable 

cost was $1.50 per direct labor hour?

Student Answer:

$1,700 

$3,000 

$5,600 

$8,000 

9. Question : In a labor intensive company in which more overhead is used 

by the more highly skilled and paid employees, which activity 

base would be most appropriate for applying overhead to 

production?

Student Answer:

Direct labor cost. 

Direct material cost. 

Direct labor hours. 

Machine hours. 

Sales value of the product produced. 

10. Question : Which of the following statements about the theory of 

constraints is (are) true?

(A) The theory of constraints focuses on determining the 

optimal product mix when one or more resources restrict the 

attainment of a goal or objective.

(B) The theory of constraints focuses on maximizing the rate of 

throughput contribution while minimizing investment and 

other operating costs.

Student Answer:

only A. 

only B. 

neither A nor B is true. 

both A and B are true.