Question 1

Computing unit fixed costs may result in misleading information.

Accepted Answer

A) True 
 B)False

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 slope?

Accepted Answer

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

Question 3

Figure 3-9. The following cost formula was developed using monthly data for a retail clothing store.
Total cost = $75,620 + ($242 ´ number of customers)
Refer to Figure 3-9.The term $75,620

Accepted Answer

A) is the independent variable. 
B) is the dependant variable. 
C) is the intercept. 
D) is the variable rate. 
A) is the independent variable. 
B) is the dependant variable. 
C) is the intercept. 
D) is the variable rate.

Question 4

___________________ are costs that in total vary in direct proportion to changes in output within the relevant range.

Accepted Answer

The answer of ___________________ are costs that in total vary...

Question 5

Andover Company makes weather balloons.The company controller wanted to calculate the fixed and variable costs associated with the maintenance costs incurred by the factory.Data for the past six months were collected.
   Required:

Accepted Answer

The answer of Andover Company makes weather balloons.The company controller...

Question 6

Figure 3-3. Okafor Company manufactures skis.The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery.Data for the past four months were collected.
  Refer to Figure 3-3.Using the high-low method calculate the variable rate for the lease cost

Accepted Answer

A) $38.18 
B) $38.20 
C) $61.50 
D) $37.25 
A) $38.18 
B) $38.20 
C) $61.50 
D) $37.25

Question 7

Per-unit variable costs

Accepted Answer

A) can be misleading and lead to poor decisions. 
B) increase as output increases. 
C) decrease as output decreases. 
D) remain constant within the relevant range. 
A) can be misleading and lead to poor decisions. 
B) increase as output increases. 
C) decrease as output decreases. 
D) remain constant within the relevant range.

Question 8

The method of least squares

Accepted Answer

A) uses the results of regression analysis to construct a cost formula. 
B) is the least accurate method. 
C) analyzes a cost relationship by plotting the data points on a graph. 
D) can easily be calculated by hand. 
A) uses the results of regression analysis to construct a cost formula. 
B) is the least accurate method. 
C) analyzes a cost relationship by plotting the data points on a graph. 
D) can easily be calculated by hand.

Question 9

Using the high-low method,the variable rate of a mixed cost equals

Accepted Answer

A) total cost at high point - (variable rate ´ output at high point) 
B) total cost at high point - (variable rate ´ output at low point) 
C)    
D)    
A) total cost at high point - (variable rate ´ output at high point) 
B) total cost at high point - (variable rate ´ output at low point) 
C)    
D)

Question 10

Which of the following would probably be a variable cost at a college?

Accepted Answer

A) salary of the head janitor 
B) cost of registration forms 
C) salary of the college president 
D) none of these options 
A) salary of the head janitor 
B) cost of registration forms 
C) salary of the college president 
D) none of these options

Question 11

Rental expense for a warehouse is an example of a ___________ cost.

Accepted Answer

The answer of Rental expense for a warehouse is an...

Question 12

As output increases variable cost per unit will also increase.

Accepted Answer

A) True 
 B)False

Question 13

Fixed costs that cannot be easily changed and typically involve a long-term contract are known as ___________________.

Accepted Answer

committed

Question 14

A _______________ displays a constant level of cost for a range of output and then jumps to a higher level of cost at some point.

Accepted Answer

The answer of A _______________ displays a constant level of...

Question 15

The scatter-graph method

Accepted Answer

A) allows a cost analyst to inspect data visually. 
B) is objective. 
C) only uses two data points. 
D) none of these are correct 
A) allows a cost analyst to inspect data visually. 
B) is objective. 
C) only uses two data points. 
D) none of these are correct

Question 16

Figure 3-9. The following cost formula was developed using monthly data for a retail clothing store.
Total cost = $75,620 + ($242 ´ number of customers)
Refer to Figure 3-9.The term $242

Accepted Answer

A) is the independent variable. 
B) is the dependant variable. 
C) is the intercept. 
D) is the variable rate. 
A) is the independent variable. 
B) is the dependant variable. 
C) is the intercept. 
D) is the variable rate.

Question 17

Which of the following is an advantage of using the scatter-graph method over the high-low method to estimate costs?

Accepted Answer

A) It is a statistical method to determine "best fit". 
B) A cost analyst can review the data visually and eliminate outliers. 
C) The quality of the cost formula relies on the objective judgment of the analysts. 
D) The cost formula can be determined simply by looking at two points of data. 
A) It is a statistical method to determine "best fit". 
B) A cost analyst can review the data visually and eliminate outliers. 
C) The quality of the cost formula relies on the objective judgment of the analysts. 
D) The cost formula can be determined simply by looking at two points of data.

Question 18

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,what would be the total budgeted cost for electricity next month assuming that 615 machine hours are budgeted?

Accepted Answer

A) $2,225 
B) $8,240 
C) $8,085 
D) $4,015 
A) $2,225 
B) $8,240 
C) $8,085 
D) $4,015

Question 19

Step costs

Accepted Answer

A) remain the same within the relevant range. 
B) have an increased fixed component at specified intervals. 
C) increase in direct proportion to increases in output. 
D) none of these are correct 
A) remain the same within the relevant range. 
B) have an increased fixed component at specified intervals. 
C) increase in direct proportion to increases in output. 
D) none of these are correct

Question 20

Figure 3-6. Taran Company incurred the following costs for the months of January and February.
  Refer to Figure 3-6.From the information above we can assume that

Accepted Answer

A) insurance and depreciation are fixed costs. 
B) output decreased from January to February. 
C) output stayed the same from January to February. 
D) insurance is a mixed cost. 
A) insurance and depreciation are fixed costs. 
B) output decreased from January to February. 
C) output stayed the same from January to February. 
D) insurance is a mixed cost.

Computing unit fixed costs may result in misleading information.

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 slope?

Figure 3-9. The following cost formula was developed using monthly data for a retail clothing store. Total cost = $75,620 + ($242 ´ number of customers) Refer to Figure 3-9.The term $75,620

___________________ are costs that in total vary in direct proportion to changes in output within the relevant range.

Andover Company makes weather balloons.The company controller wanted to calculate the fixed and variable costs associated with the maintenance costs incurred by the factory.Data for the past six months were collected. Required:

Figure 3-3. Okafor Company manufactures skis.The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery.Data for the past four months were collected. Refer to Figure 3-3.Using the high-low method calculate the variable rate for the lease cost

Per-unit variable costs

The method of least squares

Using the high-low method,the variable rate of a mixed cost equals

Which of the following would probably be a variable cost at a college?

Rental expense for a warehouse is an example of a ___________ cost.

As output increases variable cost per unit will also increase.

Fixed costs that cannot be easily changed and typically involve a long-term contract are known as ___________________.

A _______________ displays a constant level of cost for a range of output and then jumps to a higher level of cost at some point.

The scatter-graph method

Figure 3-9. The following cost formula was developed using monthly data for a retail clothing store. Total cost = $75,620 + ($242 ´ number of customers) Refer to Figure 3-9.The term $242

Which of the following is an advantage of using the scatter-graph method over the high-low method to estimate costs?

Step costs

Figure 3-6. Taran Company incurred the following costs for the months of January and February. Refer to Figure 3-6.From the information above we can assume that

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

Computing unit fixed costs may result in misleading information.

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 slope?

Figure 3-9. The following cost formula was developed using monthly data for a retail clothing store. Total cost = $75,620 + ($242 ´ number of customers) Refer to Figure 3-9.The term $75,620

___________________ are costs that in total vary in direct proportion to changes in output within the relevant range.

Andover Company makes weather balloons.The company controller wanted to calculate the fixed and variable costs associated with the maintenance costs incurred by the factory.Data for the past six months were collected. Required:

Figure 3-3. Okafor Company manufactures skis.The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery.Data for the past four months were collected. Refer to Figure 3-3.Using the high-low method calculate the variable rate for the lease cost

Per-unit variable costs

The method of least squares

Using the high-low method,the variable rate of a mixed cost equals

Which of the following would probably be a variable cost at a college?

Rental expense for a warehouse is an example of a ___________ cost.

As output increases variable cost per unit will also increase.

Fixed costs that cannot be easily changed and typically involve a long-term contract are known as ___________________.

A _______________ displays a constant level of cost for a range of output and then jumps to a higher level of cost at some point.

The scatter-graph method

Figure 3-9. The following cost formula was developed using monthly data for a retail clothing store. Total cost = $75,620 + ($242 ´ number of customers) Refer to Figure 3-9.The term $242

Which of the following is an advantage of using the scatter-graph method over the high-low method to estimate costs?

Step costs

Figure 3-6. Taran Company incurred the following costs for the months of January and February. Refer to Figure 3-6.From the information above we can assume that

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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