An Important Tool in Predicting the Volume of Activity, the Costs

question 159

Multiple Choice

An important tool in predicting the volume of activity, the costs to be incurred, the sales to be earned, and the profit to be received is:

• A) Target income analysis.
• B) Cost-volume-profit analysis.
• C) Least-squares regression of costs.
• D) Variance analysis.
• E) Process costing.

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Definitions:

Pareto Analysis

A statistical technique used for decision-making, based on the principle that a small number of causes are responsible for a large percentage of the effect.

Unsatisfying Hotel

A hotel that fails to meet the expectations or satisfaction levels of its guests.

Quality Loss Function

A mathematical formula that quantifies the cost associated with producing items that deviate from target specifications, introduced by Genichi Taguchi.

Pareto Diagram

A graphical representation that displays the relative importance of differences within a set of data, usually to identify which factors are the most significant.