CPA Business Environment and Concepts (BEC) : Learning Curve
Study concepts, example questions & explanations for CPA Business Environment and Concepts (BEC)
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Example Questions
Example Question #1 : Learning Curve
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
2
1
Both 1 and 2
Neither
1
The learning curve relates to the efficiency with which productive resources, typically labor, are employed and it suggests that productivity will increase over time.
Example Question #2 : Learning Curve
In a regression analysis, the coefficient of determination measures:
Independence of variables
Economic plausibility
Independence of residuals
Goodness of fit
Goodness of fit
The coefficient of determination measures the proportion of the total variation in the dependent variable explained by the independent variable.
Example Question #3 : Learning Curve
Multiple regression differs from simple regression in that it:
Allows the computation of the coefficient of determination
Provides an estimated constant term
Has more dependent variables
Has more independent variables
Has more independent variables
This analysis is an expansion of simple regression because it allows consideration of more than one independent variable.
Example Question #2 : Learning Curve
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?
Hourly assembly worker's wages
Office manager's salary
Salesperson's commissions
Manufacturing floor manager's salary
Manufacturing floor manager's salary
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.
Example Question #5 : Learning Curve
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?
$50,000
$168,000
$150,000
$182,000
$50,000
$90,000/($120,000/$200,000) = $150,000. $200,000 - $150,000 = $50,000.
Example Question #6 : Learning Curve
Sales forecasts are formed considering all of the following factors except:
Sunk costs
Estimates of future sales
Competitor plans
Past historical sales data
Sunk costs
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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