A company is forecasting sales volume using time series analysis. The following equation has been derived from past data and is considered to be a reliable predictor of future sales volume:
y = 20,000+80x
Where y is the total sales units each quarter and x is the time period (the first quarter of year 1 is time period 1).

The following set of seasonal variations for each quarter has been calculated using the additive model.
What is the forecast sales units for the second quarter of year 3?

• A.20,400
• B.21,520
• C.20,720
• D.21,200

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Which of the following statements about total quality management are incorrect? Select ALL that apply.

• A.Everyone within an organisation should be involved in improving quality.
• B.There is an acceptable quality level that an organisation must try to achieve.
• C.The organisation should rely on inspection to achieve quality standards.
• D.The costs of conformance are more important than the costs of non-conformance.
• E.All costs relating to quality should be examined, particularly those relating to failure costs.
• F.The culture of an organisation should be to get things right the first time.

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A manager has to decide between four mutually exclusive projects, A, B, C and D:

Using the above information, which Project would a risk seeking manager choose?

• A.Project B
• B.Project C
• C.Project D
• D.Project A

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Calculate the sensitivity of the investment decision to a change in the annual fixed costs.
By how much should the present value of the fixed cost increase, before this project is not viable?

• A.$9050
• B.$8675
• C.$6390
• D.$7698

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'Public sector organizations are often judged by their economy, efficiency and effectiveness.
Consequently, they should use an approach to budgeting other than incremental budgeting.' Required:
Explain ONE advantage and TWO disadvantages of public sector organizations using incremental budgeting.
Select all true statements.

• A.Under an incremental approach to budgeting, existing operations and the current budgeted allowance for these existing activities are taken as the base level for preparing the budget.
• B.The incremental approach encourages managers in public sector organizations to look at the efficiency and effectiveness of activities undertaken.
• C.The main advantage of incremental budgeting is that the cost of past activities becomes fixed and any inefficiencies or wastage is perpetuated.
• D.Public sector organizations tend to be fairly complex and in many cases outputs cannot be measured in monetary terms therefore the link between inputs and outputs is difficult to establish. An incremental approach can therefore provide a cost effective approach to budgeting.
• E.An incremental; approach is not as easy and fast to implement than other forms of budgeting approaches e.g. zero based budgeting.
• F.The incremental approach means that budget holders in public sector organizations will be encouraged to use up this year's budget will be as high as possible.

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