Question 1

The cost formula for monthly depreciation cost in a factory is: Total cost = $10,000
This cost

Accepted Answer

A) is strictly variable. 
B) is strictly fixed. 
C) is a mixed cost. 
D) is a step cost. 
A) is strictly variable. 
B) is strictly fixed. 
C) is a mixed cost. 
D) is a step cost.

Question 2

Figure 3-1. Total cost = Fixed cost + (Variable Rate ´ Output)
Refer to Figure 3-1.In the cost formula above which element would be the dependent variable?

Accepted Answer

A) variable rate 
B) fixed cost 
C) total cost 
D) output 
A) variable rate 
B) fixed cost 
C) total cost 
D) output

Question 3

Knowing how costs change as output changes is essential to

Accepted Answer

A) planning and controlling. 
B) controlling and decision making. 
C) planning,controlling and decision making. 
D) none of these are correct 
A) planning and controlling. 
B) controlling and decision making. 
C) planning,controlling and decision making. 
D) none of these are correct

Question 4

Explain the differences between a variable,fixed,and a mixed cost.

Accepted Answer

A variable cost changes in direct propor

Question 5

Figure 3-11. The following four months of data were collected on utility cost and the number of labor hours in a factory.
  Refer to Figure 3-11.Using the high-low method,compute the fixed cost of electricity.

Accepted Answer

A) $13,740 
B) $10,860 
C) $6,400 
D) none of these are correct 
A) $13,740 
B) $10,860 
C) $6,400 
D) none of these are correct

Question 6

Discretionary fixed costs

Accepted Answer

A) cannot be easily changed. 
B) often involve a long-term contract. 
C) can be changed relatively easy at management discretion. 
D) increase as output increases. 
A) cannot be easily changed. 
B) often involve a long-term contract. 
C) can be changed relatively easy at management discretion. 
D) increase as output increases.

Question 7

Using regression,the value of 'X Variable 1' equals the slope of the line.

Accepted Answer

A) True 
 B)False

Question 8

Olson Company makes hearing aids.Olson has found that total electricity cost for the factory can be represented by the following formula: total annual electricity cost = $149,000 + $2.75x,where x = labor hours.Last year,Olson incurred 212,000 labor hours.
Required:

Accepted Answer

The answer of Olson Company makes hearing aids.Olson has found...

Question 9

Which of the following would be a variable cost for a dentist's office?

Accepted Answer

A) depreciation on equipment 
B) cost of renting office space 
C) cost of teeth cleaning material 
D) salary of dentist 
A) depreciation on equipment 
B) cost of renting office space 
C) cost of teeth cleaning material 
D) salary of dentist

Question 10

Fixed cost per unit is $9 when 20,000 units are produced and $6 when 30,000 units are produced. What is the total fixed cost when nothing is produced?

Accepted Answer

A) $180,000 
B) $360,000 
C) $150,000 
D) $240,000 
A) $180,000 
B) $360,000 
C) $150,000 
D) $240,000

Question 11

Figure 3-8. Martin Company makes cell phones.The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory.Data for the past four months were collected.
  Coefficients shown by a regression program are:
  Refer to Figure 3-8.Using the results of regression,the cost formula for electricity cost was

Accepted Answer

A) $9.48 ´ machine hours 
B) $2,255 ´ machine hours 
C) $2,255 + ($9.48 ´ machine hours) 
D) none of these are correct 
A) $9.48 ´ machine hours 
B) $2,255 ´ machine hours 
C) $2,255 + ($9.48 ´ machine hours) 
D) none of these are correct

Question 12

The spreadsheet regression program supplies more than the estimates of the coefficients; it also provides information that can be used to see how ________ the cost equation is which is a feature not available for the high-low method.

Accepted Answer

The answer of The spreadsheet regression program supplies more than...

Question 13

Figure 3-1. Total cost = Fixed cost + (Variable Rate ´ Output)
Refer to Figure 3-1.In the cost formula above which element would be the intercept?

Accepted Answer

A) fixed cost 
B) total cost 
C) output 
D) variable rate 
A) fixed cost 
B) total cost 
C) output 
D) variable rate

Question 14

Figure 3-4. Botana Company constructed the following formula for monthly utility cost.
Total utility cost = $1,200 + ($8.10 ´ labor hours)
Assume that 775 labor hours are budgeted for the month of April.
Refer to Figure 3-4.Calculate the total variable utility cost for the month of April.

Accepted Answer

A) $1,200.00 
B) $7,477.50 
C) $6,277.50 
D) $5,077.50 
A) $1,200.00 
B) $7,477.50 
C) $6,277.50 
D) $5,077.50

Question 15

If output increases

Accepted Answer

A) per-unit fixed cost will increase. 
B) total variable costs will increase. 
C) per-unit variable costs will increase. 
D) per-unit variable costs will decrease. 
A) per-unit fixed cost will increase. 
B) total variable costs will increase. 
C) per-unit variable costs will increase. 
D) per-unit variable costs will decrease.

Question 16

When a mixed cost is graphed the Y-intercept corresponds to the

Accepted Answer

A) step cost. 
B) variable rate. 
C) fixed cost. 
D) price of the units sold. 
A) step cost. 
B) variable rate. 
C) fixed cost. 
D) price of the units sold.

Question 17

Figure 3-8. Martin Company makes cell phones.The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory.Data for the past four months were collected.
  Coefficients shown by a regression program are:
  Refer to Figure 3-8.Using the results of regression,calculate the fixed cost of electricity.

Accepted Answer

A) $2,255 
B) $9.48 
C) $2,200 
D) none of these are correct 
A) $2,255 
B) $9.48 
C) $2,200 
D) none of these are correct

Question 18

Figure 3-14. Blacken Company manufactures motorcycles.The company's management accountant wants to calculate the fixed and variable costs associated with utility cost incurred by the factory.Data for the past five months were collected.
  Refer to Figure 3-14.Using a regression program,the value of the X Variable 1 (rounded to the nearest penny)is

Accepted Answer

A) $.99. 
B) $8.83. 
C) $195.35. 
D) $11,594.00. 
A) $.99. 
B) $8.83. 
C) $195.35. 
D) $11,594.00.

Question 19

Total variable costs

Accepted Answer

A) increases as output increases. 
B) decreases as output decreases. 
C) equal a variable rate ´ amount of output. 
D) all of these are correct. 
A) increases as output increases. 
B) decreases as output decreases. 
C) equal a variable rate ´ amount of output. 
D) all of these are correct.

Question 20

When the volume of activity increases within the relevant range,the fixed cost per unit

Accepted Answer

A) decreases. 
B) increases at first,then decreases. 
C) remains the same. 
D) increase. 
A) decreases. 
B) increases at first,then decreases. 
C) remains the same. 
D) increase.

The cost formula for monthly depreciation cost in a factory is: Total cost = $10,000 This cost

Figure 3-1. Total cost = Fixed cost + (Variable Rate ´ Output) Refer to Figure 3-1.In the cost formula above which element would be the dependent variable?

Knowing how costs change as output changes is essential to

Explain the differences between a variable,fixed,and a mixed cost.

Figure 3-11. The following four months of data were collected on utility cost and the number of labor hours in a factory. Refer to Figure 3-11.Using the high-low method,compute the fixed cost of electricity.

Discretionary fixed costs

Using regression,the value of 'X Variable 1' equals the slope of the line.

Olson Company makes hearing aids.Olson has found that total electricity cost for the factory can be represented by the following formula: total annual electricity cost = $149,000 + $2.75x,where x = labor hours.Last year,Olson incurred 212,000 labor hours. Required:

Which of the following would be a variable cost for a dentist's office?

Fixed cost per unit is $9 when 20,000 units are produced and $6 when 30,000 units are produced. What is the total fixed cost when nothing is produced?

The spreadsheet regression program supplies more than the estimates of the coefficients; it also provides information that can be used to see how ________ the cost equation is which is a feature not available for the high-low method.

Figure 3-1. Total cost = Fixed cost + (Variable Rate ´ Output) Refer to Figure 3-1.In the cost formula above which element would be the intercept?

Figure 3-4. Botana Company constructed the following formula for monthly utility cost. Total utility cost = $1,200 + ($8.10 ´ labor hours) Assume that 775 labor hours are budgeted for the month of April. Refer to Figure 3-4.Calculate the total variable utility cost for the month of April.

If output increases

When a mixed cost is graphed the Y-intercept corresponds to the

Total variable costs

When the volume of activity increases within the relevant range,the fixed cost per unit

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

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Exam 3: Cost Behavior

The cost formula for monthly depreciation cost in a factory is: Total cost = $10,000 This cost

Figure 3-1. Total cost = Fixed cost + (Variable Rate ´ Output) Refer to Figure 3-1.In the cost formula above which element would be the dependent variable?

Knowing how costs change as output changes is essential to

Explain the differences between a variable,fixed,and a mixed cost.

Figure 3-11. The following four months of data were collected on utility cost and the number of labor hours in a factory. Refer to Figure 3-11.Using the high-low method,compute the fixed cost of electricity.

Discretionary fixed costs

Using regression,the value of 'X Variable 1' equals the slope of the line.

Olson Company makes hearing aids.Olson has found that total electricity cost for the factory can be represented by the following formula: total annual electricity cost = $149,000 + $2.75x,where x = labor hours.Last year,Olson incurred 212,000 labor hours. Required:

Which of the following would be a variable cost for a dentist's office?

Fixed cost per unit is $9 when 20,000 units are produced and $6 when 30,000 units are produced. What is the total fixed cost when nothing is produced?

The spreadsheet regression program supplies more than the estimates of the coefficients; it also provides information that can be used to see how ________ the cost equation is which is a feature not available for the high-low method.

Figure 3-1. Total cost = Fixed cost + (Variable Rate ´ Output) Refer to Figure 3-1.In the cost formula above which element would be the intercept?

Figure 3-4. Botana Company constructed the following formula for monthly utility cost. Total utility cost = $1,200 + ($8.10 ´ labor hours) Assume that 775 labor hours are budgeted for the month of April. Refer to Figure 3-4.Calculate the total variable utility cost for the month of April.

If output increases

When a mixed cost is graphed the Y-intercept corresponds to the

Total variable costs

When the volume of activity increases within the relevant range,the fixed cost per unit

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

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