1. I. Total Fixed costs is treated differently under absorption costing and variable costing. II. Theoretical capacity is the measure of activity that is likely to give the lowest standard fixed cost per unit.

True True

False False

True False

False True

2. Which of the following concepts or practices is (are) incompatible with JIT?

Local (department) optimization

EOQ model

Inspect once ta end of the process

All of the above

3. The major objective of preparing scatter diagram is to:

derive an equation to predict future cost

perform regression analysis on the result and determine the relevant range

Find the high and low points to use for the high low method of estimating cost.

None of the above

4. In conducting a post engagement follow up, the following areas will be covered except:

Sources of data

Work programs and schedules

Engagement program

Fees earned on each part of engagement