41. CSO: 1B2d LOS: 1B2n
　　When compared with ideal standards, practical standards
　　a. produce lower per-unit product costs.
　　b. result in a less desirable basis for the development of budgets.
　　c. incorporate very generous allowances for spoilage and worker inefficiencies.
　　d. serve as a better motivating target for manufacturing personnel.
　　42. CSO: 1B2d LOS: 1B2q
　　Jura Corporation is developing standards for the next year. Currently XZ-26, one of the material components, is being purchased for $36.45 per unit. It is expected that the component’s cost will increase by approximately 10% next year and the price could range from $38.75 to $44.18 per unit depending on the quantity purchased. The appropriate standard for XZ-26 for next year should be set at the
　　a. current actual cost plus the forecasted 10% price increase.
　　b. lowest purchase price in the anticipated range to keep pressure on purchasing to always buy in the lowest price range.
　　c. highest price in the anticipated range to insure that there are only favorable purchase price variances.
　　d. price agreed upon by the purchasing manager and the appropriate level of company management.
　　43. CSO: 1B2d LOS: 1B2m
　　Which one of the following will allow a better use of standard costs and variance analysis to help improve managerial decision-making?
　　a. Company A does not differentiate between variable and fixed overhead in calculating its overhead variances.
　　b. Company B uses the prior year’s average actual cost as the current year’s standard.
　　c. Company C investigates only negative variances.
　　d. Company D constantly revises standards to reflect learning curves.
　　44. CSO: 1B2d LOS: 1B2m
　　After performing a thorough study of Michigan Company’s operations, an independent consultant determined that the firm’s labor standards were probably too tight. Which one of the following facts would be inconsistent with the consultant’s conclusion?
　　a. A review of performance reports revealed the presence of many unfavorable efficiency variances.
　　b. Michigan’s budgeting process was well-defined and based on a bottom-up philosophy.
　　c. Management noted that minimal incentive bonuses have been paid in recent periods.
　　d. Production supervisors found several significant fluctuations in manufacturing volume, with short-term increases on output being followed by rapid, sustained declines.
　　45. CSO: 1B3a LOS: 1B3a
　　For cost estimation simple regression differs from multiple regression in that simple regression uses only
　　a. one dependent variable, while multiple regression uses all available data to estimate the cost function.
　　b. dependent variables, while multiple regression can use both dependent and independent variables.
　　c. one independent variable, while multiple regression uses more than one independent variable.
　　d. one dependent variable, while multiple regression uses more than one dependent variable.