Exam 3: Cost Behavior

Ruskin Company had utilities cost of $95,000 at an output level of 30,000 units.The utilities cost was a mixed cost and the fixed portion was $50,000.What would the estimate of total utilities cost be at an output level of 40,000 units?

__________________________ is critically important in determining cost behavior and is by far the most widely used method in practice.

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 $87,100

A driver is a factor that causes or leads to a change in a cost.

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 forecasted utility cost at 2,600 machine hours (rounded to the nearest dollar)is

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.Select the correct set of high and low months. High Low

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.What would the estimate of Okafor Company's total lease cost be at a level of 500 machine hours?

When a mixed cost is graphed the slope of the line equals

Which of the following is not an example of a discretionary fixed cost?

Margolo Company makes cross-country skis.The company controller wants to calculate the fixed and variable costs associated with janitorial services incurred by the factory.Data for the past six months were collected. Required:

Figure 3-6. Taran Company incurred the following costs for the months of January and February. Refer to Figure 3-6.If output was 5,000 units in January and 10,000 units in February we can assume that

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

Figure 3-5. Maxwell Company makes treadmills.The company controller wants to calculate the fixed and variable costs associated with the janitorial costs incurred in the factory.Data for the past four months were collected. Refer to Figure 3-5.Using the high-low method calculate the fixed cost of the janitorial services

Harnock Company constructed the following cost formula for its monthly janitorial cost. Total monthly janitorial cost = $5,000 + ($.48 ´ units of output) Required:

Variable costs within the relevant range