A Test Is Conducted to Compare Three Different Income Tax

question 73

Multiple Choice

A test is conducted to compare three different income tax software packages to determine whether there is any difference in the average time it takes to prepare income tax returns using the three different software packages. Ten different person's income tax returns are done by each of the three software packages and the time is recorded for each. Assuming that results show that blocking was effective, this means that:

• A) there are significant differences in the average times needed by the 3 different software packages.
• B) there are significant differences in the average times needed for the 10 different person's tax returns.
• C) the analysis should be redone using a one-way analysis of variance.
• D) the randomized complete block was the wrong method to use.

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Definitions:

Net Operating Income

The total profit of a business after operating expenses have been deducted, but before taxes and interest.

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of goods sold, excluding fixed manufacturing overhead.

Contribution Margin

The gap between sales income and variable expenses, showing the extent to which income aids in offsetting fixed expenses and creating earnings.

Cost-Volume-Profit

An analysis tool used to determine how changes in costs and volume affect a company's operating income and net income.