Question 1

A statistical method for finding the best-fitting cost equation to a set of data is the

Accepted Answer

A) scattergraph method. 
B) high-low method. 
C) visual fit method. 
D) least-squares regression methoD.Least-squares regression is the only statistical technique among those listed. 
A) scattergraph method. 
B) high-low method. 
C) visual fit method. 
D) least-squares regression methoD.Least-squares regression is the only statistical technique among those listed.

Question 2

A graph of the relationship between the total cost and the activity level is called a

Accepted Answer

A) relevant range. 
B) scattergraph. 
C) contribution margin graph. 
D) dependent variable. 
A) relevant range. 
B) scattergraph. 
C) contribution margin graph. 
D) dependent variable.

Question 3

The high-low method is a cost estimating approach that uses _______________ to find the cost line.

Accepted Answer

A) only two data points 
B) all available data points 
C) only four data points 
D) personal intuition 
A) only two data points 
B) all available data points 
C) only four data points 
D) personal intuition

Question 4

Georgia uses the high-low method of estimating costs.Georgia had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 10,000 units,total costs were $78,000.Georgia would estimate variable cost per unit as

Accepted Answer

A) $14.00. 
B) $9.10. 
C) $5.60. 
D) $10.54. 
A) $14.00. 
B) $9.10. 
C) $5.60. 
D) $10.54.

Question 5

The unit contribution margin tells how much each additional unit sold will contribute to covering variable costs.Unit contribution margin tells us how much each additional unit sold will contribute to the bottom line.

Accepted Answer

A) True 
 B)False

Question 6

A scattergraph is useful in recognizing unusual patterns in the cost data.A scattergraph graphically illustrates the relationship between cost and activity,so unusual patterns can be seen visually.

Accepted Answer

A) True 
 B)False

Question 7

The cost estimating approach that uses the two most extreme activity observations is the

Accepted Answer

A) scattergraph method. 
B) high-low method. 
C) visual fit method. 
D) regression analysis. 
A) scattergraph method. 
B) high-low method. 
C) visual fit method. 
D) regression analysis.

Question 8

A cost driver

Accepted Answer

A) is the same as a fixed cost. 
B) is an activity that causes total costs to change. 
C) is the same as margin of safety. 
D) is a method of calculating mixed costs. 
A) is the same as a fixed cost. 
B) is an activity that causes total costs to change. 
C) is the same as margin of safety. 
D) is a method of calculating mixed costs.

Question 9

Elm uses the high-low method of estimating costs.Elm had total costs of $250,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 10,000 units,total costs were $390,000.Elm would estimate variable cost per unit as

Accepted Answer

A) $70.00. 
B) $45.50. 
C) $28.00. 
D) $52.71. 
A) $70.00. 
B) $45.50. 
C) $28.00. 
D) $52.71.

Question 10

The least-squares regression method uses all of the available data to find the best fitting line.Least-squares regression is a statistical data that uses all the available data to find the best fitting line.

Accepted Answer

A) True 
 B)False

Question 11

A scattergraph is a graph with

Accepted Answer

A) total cost plotted on the vertical axis and activity on the horizontal axis. 
B) activity plotted on the vertical axis and contribution margin on the horizontal axis. 
C) contribution margin plotted on the vertical axis and sales revenues on the horizontal axis. 
D) the vertical axis measured in units and the horizontal axis measured in dollars. 
A) total cost plotted on the vertical axis and activity on the horizontal axis. 
B) activity plotted on the vertical axis and contribution margin on the horizontal axis. 
C) contribution margin plotted on the vertical axis and sales revenues on the horizontal axis. 
D) the vertical axis measured in units and the horizontal axis measured in dollars.

Question 12

Flint Enterprises had the following cost and production information for April: Inventory increased by 3,000 units during April.What is Flint Enterprise's income under variable costing?

Accepted Answer

A) $1,400,000 
B) $1,460,000 
C) $1,745,000 
D) $1,785,000 
A) $1,400,000 
B) $1,460,000 
C) $1,745,000 
D) $1,785,000

Question 13

The unit contribution margin

Accepted Answer

A) equals total sales revenue minus total variable costs. 
B) equals total contribution margin times total units. 
C) tells us how much each additional unit sold will increase profit. 
D) equals overall profit per unit. 
A) equals total sales revenue minus total variable costs. 
B) equals total contribution margin times total units. 
C) tells us how much each additional unit sold will increase profit. 
D) equals overall profit per unit.

Question 14

Regression analysis is a cost-estimating approach that uses _______________ to find the cost line.

Accepted Answer

A) only two data points 
B) all available data points 
C) only four data points 
D) personal intuition 
A) only two data points 
B) all available data points 
C) only four data points 
D) personal intuition

Question 15

Which of the following is a variable cost?

Accepted Answer

A) A cost that is $26,000 when production is 65,000,and $26,000 when production is 91,000. 
B) A cost that is $26,000 when production is 65,000,and $36,400 when production is 91,000. 
C) A cost that is $26,000 when production is 65,000,and $52,000 when production is 91,000. 
D) A cost that is $52,000 when production is 65,000,and $52,000 when production is 91,000. 
A) A cost that is $26,000 when production is 65,000,and $26,000 when production is 91,000. 
B) A cost that is $26,000 when production is 65,000,and $36,400 when production is 91,000. 
C) A cost that is $26,000 when production is 65,000,and $52,000 when production is 91,000. 
D) A cost that is $52,000 when production is 65,000,and $52,000 when production is 91,000.

Question 16

The equation for a mixed cost is total fixed costs + (variable cost per unit × units of activity).Total cost = fixed cost + (variable cost per unit × activity level).

Accepted Answer

A) True 
 B)False

Question 17

Jasper Enterprises had the following cost and production information for April: What is Jasper Enterprise's income under variable costing?

Accepted Answer

A) $1,400,000 
B) $1,460,000 
C) $1,745,000 
D) $1,785,000 
A) $1,400,000 
B) $1,460,000 
C) $1,745,000 
D) $1,785,000

Question 18

Step costs are fixed over some range of activity and then increase like a variable cost.Step costs are fixed over a range of activity and then increase in a step-like fashion when a capacity limit is reached.

Accepted Answer

A) True 
 B)False

Question 19

A mixed cost

Accepted Answer

A) is fixed over a wider range of activity than a step cost. 
B) is a fixed cost over the relevant range and a variable cost everywhere else. 
C) contains both fixed and variable components. 
D) always increases on a per unit basis. 
A) is fixed over a wider range of activity than a step cost. 
B) is a fixed cost over the relevant range and a variable cost everywhere else. 
C) contains both fixed and variable components. 
D) always increases on a per unit basis.

Question 20

What is the difference between full absorption costing and variable costing?

Accepted Answer

A) In full absorption costing,all of the non-manufacturing costs are expensed.In variable costing,all of the non-manufacturing expenses are included in the cost of the product. 
B) In full absorption costing,fixed manufacturing overhead is expensed.In variable costing,fixed manufacturing overhead is included in the cost of the product. 
C) In full absorption costing,fixed manufacturing overhead is included in the cost of the product.In variable costing,fixed manufacturing overhead is expensed. 
D) Variable costing must be used for external financial reports while full absorption costing can only be used for internal reporting. 
A) In full absorption costing,all of the non-manufacturing costs are expensed.In variable costing,all of the non-manufacturing expenses are included in the cost of the product. 
B) In full absorption costing,fixed manufacturing overhead is expensed.In variable costing,fixed manufacturing overhead is included in the cost of the product. 
C) In full absorption costing,fixed manufacturing overhead is included in the cost of the product.In variable costing,fixed manufacturing overhead is expensed. 
D) Variable costing must be used for external financial reports while full absorption costing can only be used for internal reporting.

A statistical method for finding the best-fitting cost equation to a set of data is the

A graph of the relationship between the total cost and the activity level is called a

The high-low method is a cost estimating approach that uses _______________ to find the cost line.

Georgia uses the high-low method of estimating costs.Georgia had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 10,000 units,total costs were $78,000.Georgia would estimate variable cost per unit as

The unit contribution margin tells how much each additional unit sold will contribute to covering variable costs.Unit contribution margin tells us how much each additional unit sold will contribute to the bottom line.

A scattergraph is useful in recognizing unusual patterns in the cost data.A scattergraph graphically illustrates the relationship between cost and activity,so unusual patterns can be seen visually.

The cost estimating approach that uses the two most extreme activity observations is the

A cost driver

Elm uses the high-low method of estimating costs.Elm had total costs of $250,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 10,000 units,total costs were $390,000.Elm would estimate variable cost per unit as

The least-squares regression method uses all of the available data to find the best fitting line.Least-squares regression is a statistical data that uses all the available data to find the best fitting line.

A scattergraph is a graph with

Flint Enterprises had the following cost and production information for April: Inventory increased by 3,000 units during April.What is Flint Enterprise's income under variable costing?

The unit contribution margin

Regression analysis is a cost-estimating approach that uses _______________ to find the cost line.

Which of the following is a variable cost?

The equation for a mixed cost is total fixed costs + (variable cost per unit × units of activity).Total cost = fixed cost + (variable cost per unit × activity level).

Jasper Enterprises had the following cost and production information for April: What is Jasper Enterprise's income under variable costing?

Step costs are fixed over some range of activity and then increase like a variable cost.Step costs are fixed over a range of activity and then increase in a step-like fashion when a capacity limit is reached.

A mixed cost

What is the difference between full absorption costing and variable costing?

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 5: Cost Behavior

A statistical method for finding the best-fitting cost equation to a set of data is the

A graph of the relationship between the total cost and the activity level is called a

The high-low method is a cost estimating approach that uses _______________ to find the cost line.

Georgia uses the high-low method of estimating costs.Georgia had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 10,000 units,total costs were $78,000.Georgia would estimate variable cost per unit as

The unit contribution margin tells how much each additional unit sold will contribute to covering variable costs.Unit contribution margin tells us how much each additional unit sold will contribute to the bottom line.

A scattergraph is useful in recognizing unusual patterns in the cost data.A scattergraph graphically illustrates the relationship between cost and activity,so unusual patterns can be seen visually.

The cost estimating approach that uses the two most extreme activity observations is the

A cost driver

Elm uses the high-low method of estimating costs.Elm had total costs of $250,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 10,000 units,total costs were $390,000.Elm would estimate variable cost per unit as

The least-squares regression method uses all of the available data to find the best fitting line.Least-squares regression is a statistical data that uses all the available data to find the best fitting line.

A scattergraph is a graph with

Flint Enterprises had the following cost and production information for April: Inventory increased by 3,000 units during April.What is Flint Enterprise's income under variable costing?

The unit contribution margin

Regression analysis is a cost-estimating approach that uses _______________ to find the cost line.

Which of the following is a variable cost?

The equation for a mixed cost is total fixed costs + (variable cost per unit × units of activity).Total cost = fixed cost + (variable cost per unit × activity level).

Jasper Enterprises had the following cost and production information for April: What is Jasper Enterprise's income under variable costing?

Step costs are fixed over some range of activity and then increase like a variable cost.Step costs are fixed over a range of activity and then increase in a step-like fashion when a capacity limit is reached.

A mixed cost

What is the difference between full absorption costing and variable costing?

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters