15. CSO: 1A2a LOS: 1A2b
Dawson Manufacturing developed the following multiple regression equation, utilizing
many years of data, and uses it to model, or estimate, the cost of its product.
Cost = FC + a*L + b*M
Where: FC = fixed costs
L = labor rate per hour
M = material cost per pound
Which one of the following changes would have the greatest impact on invalidating the
results of this model?
a. A significant reduction in factory overheads, which are a component of fixed
costs.
b. Renegotiation of the union contract calling for much higher wage rates.
c. A large drop in material costs, as a result of purchasing the material from a
foreign source.
d. A significant change in labor productivity.
Bạn đang xem 15. - CMA EXAM SUPPORT PACKAGE 1