1- What does sensitivity analysis refers to? a. variable costs only. b. control. c. what-if situations. d. fixed costs only.

2-The new quality-based view includes which of the following?

	a.	waiting for inspections of finished products.
	b.	establishing quality at the beginning of the process.
	c.	reworking defective goods.
	d.	incurring less than 3 percent defects is a reasonable goal.

3- A current theme in business today is that "quality is free. Which of the following statements best exemplifies that theme?

a.

Quality is always free in the short-run.

b.

Short-run benefits will always outweigh the costs of improving quality.

c.

If quality is built into the product, the resulting benefits far outweigh the costs of improving quality.

.

d. Cost-benefit analyses is the primary focus in improving quality.

4- What are selling, general and administrative costs considered sticky?

a.

These costs increase more when sales increase than they decrease when sales decrease by the same amount.

b.

These costs increase less when sales increase than they decrease when sales decrease by the same amount.

c.

.

d. None of the answers are correct

5- . Which of the following costs are capacity-sustaining activities in the product cost hierarchy?

	a.	Direct Materials.
	b.	Product testing.
	c.	Energy to run machines.
	d.	Heat and lighting.

6- Which of the following reflects the simplest allocation method for a factory?

	a.	The unit cost allocation method.
	b.	The department allocation method.
	c.	The plantwide allocation method.
	d.	The use of activity-based costing.