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Given that demand exceeds capacity, that there is no spoilage or waste, and that there is full utilization of a constant number of assembly hours, the number of components needed for an assembly operation with an 80% learning curve should (1) Increase for successive periods (2) Decrease per unit of output
The learning curve relates to the efficiency with which productive resources, typically labor, are employed and it suggests that productivity will increase over time.
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In a regression analysis, the coefficient of determination measures:
The coefficient of determination measures the proportion of the total variation in the dependent variable explained by the independent variable.
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Multiple regression differs from simple regression in that it:
This analysis is an expansion of simple regression because it allows consideration of more than one independent variable.
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Which of the following labor costs for a manufacturing company is deducted from revenues in order to determine gross margin but is not deducted from revenues to determine contribution margin?
The manufacturing floor manager's salary is considered fixed factory overhead and is a part of the gross margin calculation but not part of the contribution margin calculation.
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What is a company's margin of safety if it has sales of $200,000, a contribution margin of $120,000, fixed costs of $90,000, and income taxes of $12,000?
$90,000/($120,000/$200,000) = $150,000. $200,000 - $150,000 = $50,000.
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Sales forecasts are formed considering all of the following factors except:
Sunk costs should not be considered as there is no recuperating them and they do not play a role in forecasts at all.
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