Question 1

The formula for a mixed cost is

Accepted Answer

A) total cost = total variable cost + ( fixed rate x amount of output) 
B) total cost = total fixed cost + (variable rate ´ amount of output) 
C) total cost = variable rate ´ amount of output 
D) none of these are correct 
A) total cost = total variable cost + ( fixed rate x amount of output) 
B) total cost = total fixed cost + (variable rate ´ amount of output) 
C) total cost = variable rate ´ amount of output 
D) none of these are correct

Question 2

Managerial judgment

Accepted Answer

A) is the most accurate way to determine cost behavior. 
B) is the least used method in practice. 
C) is critically important in determining cost behavior. 
D) none of these are correct 
A) is the most accurate way to determine cost behavior. 
B) is the least used method in practice. 
C) is critically important in determining cost behavior. 
D) none of these are correct

Question 3

Which of the following would not be an example of a fixed cost?

Accepted Answer

A) glue used to put together tables 
B) insurance on factory building 
C) depreciation on factory building 
D) property taxes 
A) glue used to put together tables 
B) insurance on factory building 
C) depreciation on factory building 
D) property taxes

Question 4

Figure 3-13. The following six months of data were collected on electricity cost and the number of machine hours in a factory.
  Refer to Figure 3-13.A dependent variable value used in calculating the cost line using the high-low method is:

Accepted Answer

A) $27,900 
B) 5,430 
C) $25,160 
D) 4,500 
A) $27,900 
B) 5,430 
C) $25,160 
D) 4,500

Question 5

Calculation of the cost line using the high-low method tests the lowest cost period to see if it is an outlier.

Accepted Answer

A) True 
 B)False

Question 6

Ross Company has the following information available regarding costs at various levels of monthly production:
   Required:

Accepted Answer

The answer of Ross Company has the following information available...

Question 7

Why is it necessary to separate a mixed cost into its variable and fixed components?

Accepted Answer

For management to effectively plan,contr

Question 8

Using the high-low method,the calculation of the cost line uses the highest and lowest cost period.

Accepted Answer

A) True 
 B)False

Question 9

The cost of advertising is usually a discretionary fixed cost.

Accepted Answer

A) True 
 B)False

Question 10

The ________________ is the range of output over which the assumed cost relationship is valid for the normal operations of a firm.

Accepted Answer

The answer of The ________________ is the range of output...

Question 11

Figure 3-13. The following six months of data were collected on electricity cost and the number of machine hours in a factory.
  Refer to Figure 3-13.Select the correct set of high and low months.
High Low

Accepted Answer

A) June July 
B) June October 
C) October September 
D) October June 
A) June July 
B) June October 
C) October September 
D) October June

Question 12

Boswan Company incurred the following costs and machine hours for the months of April and May.
   Required:

Accepted Answer

The answer of Boswan Company incurred the following costs and...

Question 13

Which of the following would probably be a mixed cost?

Accepted Answer

A) rent on building 
B) raw materials 
C) repairs and maintenance 
D) depreciation 
A) rent on building 
B) raw materials 
C) repairs and maintenance 
D) depreciation

Question 14

A cost that changes in total as output changes is a variable cost.

Accepted Answer

A) True 
 B)False

Question 15

Figure 3-10. The following cost formula was developed using the monthly data for an accounting firm.
Total cost = $87,100 + ($210 ´ number of tax returns)
Refer to Figure 3-10.The term "number of tax returns"

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 16

The relevant range

Accepted Answer

A) is the normal range of output. 
B) is the range of output where cost relationships are valid. 
C) may change from period to period. 
D) all of these are correct 
A) is the normal range of output. 
B) is the range of output where cost relationships are valid. 
C) may change from period to period. 
D) all of these are correct

Question 17

The ______________________________ is a statistical way to find the best-fitting line through a set of data points.
or

Accepted Answer

method of

Question 18

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 utility cost for the month of April.

Accepted Answer

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

Question 19

Figure 3-2.   Refer to Figure 3-2.The cost behavior of the materials cost is

Accepted Answer

A) fixed 
B) variable 
C) committed 
D) discretionary 
A) fixed 
B) variable 
C) committed 
D) discretionary

Question 20

Figure 3-2.   Refer to Figure 3-2.What should the total materials cost be at a production level of 220,000 toys?

Accepted Answer

A) $44,000 
B) $88,000 
C) $22,000 
D) $132,000 
A) $44,000 
B) $88,000 
C) $22,000 
D) $132,000

The formula for a mixed cost is

Managerial judgment

Which of the following would not be an example of a fixed cost?

Figure 3-13. The following six months of data were collected on electricity cost and the number of machine hours in a factory. Refer to Figure 3-13.A dependent variable value used in calculating the cost line using the high-low method is:

Calculation of the cost line using the high-low method tests the lowest cost period to see if it is an outlier.

Ross Company has the following information available regarding costs at various levels of monthly production: Required:

Why is it necessary to separate a mixed cost into its variable and fixed components?

Using the high-low method,the calculation of the cost line uses the highest and lowest cost period.

The cost of advertising is usually a discretionary fixed cost.

The ________________ is the range of output over which the assumed cost relationship is valid for the normal operations of a firm.

Figure 3-13. The following six months of data were collected on electricity cost and the number of machine hours in a factory. Refer to Figure 3-13.Select the correct set of high and low months. High Low

Boswan Company incurred the following costs and machine hours for the months of April and May. Required:

Which of the following would probably be a mixed cost?

A cost that changes in total as output changes is a variable cost.

Figure 3-10. The following cost formula was developed using the monthly data for an accounting firm. Total cost = $87,100 + ($210 ´ number of tax returns) Refer to Figure 3-10.The term "number of tax returns"

The relevant range

The ______________________________ is a statistical way to find the best-fitting line through a set of data points. or

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 utility cost for the month of April.

Figure 3-2. Refer to Figure 3-2.The cost behavior of the materials cost is

Figure 3-2. Refer to Figure 3-2.What should the total materials cost be at a production level of 220,000 toys?

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 formula for a mixed cost is

Managerial judgment

Which of the following would not be an example of a fixed cost?

Figure 3-13. The following six months of data were collected on electricity cost and the number of machine hours in a factory. Refer to Figure 3-13.A dependent variable value used in calculating the cost line using the high-low method is:

Calculation of the cost line using the high-low method tests the lowest cost period to see if it is an outlier.

Ross Company has the following information available regarding costs at various levels of monthly production: Required:

Why is it necessary to separate a mixed cost into its variable and fixed components?

Using the high-low method,the calculation of the cost line uses the highest and lowest cost period.

The cost of advertising is usually a discretionary fixed cost.

The ________________ is the range of output over which the assumed cost relationship is valid for the normal operations of a firm.

Figure 3-13. The following six months of data were collected on electricity cost and the number of machine hours in a factory. Refer to Figure 3-13.Select the correct set of high and low months. High Low

Boswan Company incurred the following costs and machine hours for the months of April and May. Required:

Which of the following would probably be a mixed cost?

A cost that changes in total as output changes is a variable cost.

Figure 3-10. The following cost formula was developed using the monthly data for an accounting firm. Total cost = $87,100 + ($210 ´ number of tax returns) Refer to Figure 3-10.The term "number of tax returns"

The relevant range

The ______________________________ is a statistical way to find the best-fitting line through a set of data points. or

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 utility cost for the month of April.

Figure 3-2. Refer to Figure 3-2.The cost behavior of the materials cost is

Figure 3-2. Refer to Figure 3-2.What should the total materials cost be at a production level of 220,000 toys?

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

Filters