# ADM 3346 Study Guide - Midterm Guide: Regression Analysis, Academic Integrity, Finished Good

by OC818853

School

University of OttawaDepartment

AdministrationCourse Code

ADM 3346Professor

Tiemei L IStudy Guide

MidtermThis

**preview**shows pages 1-3. to view the full**10 pages of the document.**ADM 3346 X

Mid Term Examination

Cost Accounting

Spring/Summer 2012

Solutions

2 hours

Student Name: _________________________________

Student #: _____________________________________

Section: (Prof. Robert Collier)

Instructions:

1. This examination comprises 5 questions over 15 pages. The exam booklet is not to be

removed from the examination room. You may separate the pages but ensure that you put

them back together stapled before handing your exam in.

2. Limit your answer to the space provided. A blank sheet for rough work and supporting

calculations is given at the end of the exam on the last page (page 14).

3. This exam is out of 65 marks and is 2 hours long. You should budget approximately 1.8

minutes per mark.

4. Please do not ask the invigilator or the professor any questions, as they will not be

answered. State reasonable assumptions, if you feel they are necessary.

5. Language dictionaries (non-electronic) are allowed if the invigilator permits them.

6. You must sign the Statement of Academic integrity on page 2 of this exam.

Marks

Question No. 1 – Cost Estimation

/14

Question No. 2 – Job Costing

/14

Question No. 3 – CVP Analysis

/12

Question No. 4 – Process Costing

/18

Question No. 5 – ABC

/7

Total

/65

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

2

Statement of Academic Integrity

The Telfer School of Management does not condone academic fraud, an act by a student

that may result in a false academic evaluation of that student or of another student. Without

limiting the generality of this definition, academic fraud occurs when a student commits any

of the following offences: plagiarism or cheating of any kind, use of books, notes,

mathematical tables, dictionaries or other study aid unless an explicit written note to the

contrary appears on the exam, to have in his/her possession cameras, radios (radios with

head sets), tape recorders, pagers, cell phones, or any other communication device which

has not been previously authorized in writing.

Statement to be signed by the student:

I have read the text on academic integrity and I pledge not to have committed or attempted

to commit academic fraud in this examination.

Signed:______________________________________

Note: an examination copy or booklet without that signed statement will not be graded and

will receive a final exam grade of zero.

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

3

Question No. 1 (14 marks)

Armer Company is accumulating data to use in preparing its annual profit plan for the coming

year. The cost behavior pattern of the maintenance costs must be determined. The accounting

staff has suggested the use of linear regression to derive an equation for maintenance hours and

costs. Data regarding the maintenance hours and costs for the last year and the results of

regression analysis follow:

Month Hours of Activity Maintenance Costs

January 480 $4,200

February 320 3,000

March 400 3,600

April 300 2,820

May 500 4,350

June 310 2,960

July 320 3,030

August 520 4,470

September 490 4,260

October 470 4,050

November 350 3,300

December 340 3,160

Sum (Σ) 4,800 43,200

Average (μ) 400 3,600

Regression Statistics

Adjusted R-Square 0.99724

Standard Error of the Estimate 34.469

Observations 12

a (intercept) 684.65

b coefficient 7.2884

t-value for β60.105

Required:

(a) If Armer Company uses the high-low method of cost estimation, write the

equation for the relationship between hours of activity and maintenance costs.

(4 marks)

(b) Using the data from the regression statistics, calculate budgeted maintenance costs

assuming activity in a given month is 420 hours. (2 marks)

(c) What is the total variance (in percentage terms) that can be explained by the

regression equation? (2 marks)

(d) Assume the ρ-value for the slope in the regression analysis has a value of 0.01.

Explain the meaning of this ρ-value. (2 marks)

(e) Armer Company is considering adding additional cost drivers and performing

multiple regression analysis. Name four (4) assumptions inherent in the use of

multiple regression analysis. (4 marks)

###### You're Reading a Preview

Unlock to view full version