Question 1

A lump sum amount of research and development planned for Senko Corporation would most likely be identified as a_____.

Accepted Answer

A) purely variable cost 
B) discretionary fixed cost 
C) step cost 
D) mixed cost 
A) purely variable cost 
B) discretionary fixed cost 
C) step cost 
D) mixed cost B

Question 2

Committed fixed costs can be altered by management if management decides that different levels of spending are desirable.

Accepted Answer

A) True 
 B)False  False

Question 3

Bush Motel's cost function based on guest-days of occupancy for custodial cost is given as: Y = $60,000 + $4.50X.Bush Motel expects an occupancy level of 8,000 guest days.Bush Motel's expected total variable cost is:

Accepted Answer

A) $5.50 
B) $36,000 
C) $60,000 
D) $115,000 
A) $5.50 
B) $36,000 
C) $60,000 
D) $115,000 B

Question 4

Least-squares regression is a reliable method of cost estimation.

Accepted Answer

A) True 
 B)False

Question 5

Insomniac Hotel's cost function based on guest-days of occupancy for custodial cost is given as: Y = $60,000 + $10.00X.Insomniac Hotel expects an occupancy level of 15,000 guest days.Insomniac Hotel's expected total cost is _____.

Accepted Answer

A) $10.00 
B) $60,000 
C) $120,000 
D) $210,000 
A) $10.00 
B) $60,000 
C) $120,000 
D) $210,000

Question 6

Merkey Motel's cost function based on guest-days of occupancy for custodial cost is given as: Y = $50,000 + $7.50X.Merkey Motel expects an occupancy level of 10,000 guest days.Merkey Motel's expected total fixed cost is _____.

Accepted Answer

A) $7.50 
B) $50,000 
C) $75,000 
D) $105,000 
A) $7.50 
B) $50,000 
C) $75,000 
D) $105,000

Question 7

In the mixed?cost function, Y = $72,000 + $7.70X, the $72,000 stands for _____.

Accepted Answer

A) total fixed cost 
B) total cost 
C) variable cost per unit of cost driver 
D) number of units of the cost driver 
A) total fixed cost 
B) total cost 
C) variable cost per unit of cost driver 
D) number of units of the cost driver

Question 8

It may be difficult to trace cost to products and services if the costs are ?____.

Accepted Answer

A) volume-driven 
B) affected by activities not related to volume 
C) affected by multiple cost drivers 
D) affected by activities not related to volume and by multiple cost drivers 
A) volume-driven 
B) affected by activities not related to volume 
C) affected by multiple cost drivers 
D) affected by activities not related to volume and by multiple cost drivers

Question 9

The application of cost measures to expected future activity levels to forecast future costs

Accepted Answer

The answer of The application of cost measures to expected...

Question 10

One of the simplest methods to measure a linear cost function from past data is the _____.

Accepted Answer

A) regression analysis method 
B) high?low method 
C) least?squares regression method 
D) visual-fit method 
A) regression analysis method 
B) high?low method 
C) least?squares regression method 
D) visual-fit method

Question 11

_____ is the first step in estimating or predicting costs as a function of appropriate cost drivers.

Accepted Answer

A) Cost measurement 
B) Cost determination 
C) Cost behavior investigation 
D) Cost driver identification 
A) Cost measurement 
B) Cost determination 
C) Cost behavior investigation 
D) Cost driver identification

Question 12

Presented below is the production data for the first six months of the year showing the mixed costs incurred by Andrew Company. $$\begin{array} { l c c } 
\text { Month } & \underline { \text { Cost } } & \underline { \text { Units } } \
\text { July } & \$ 5,890 & 4,100 \
\text { August } & 4,024 & 3,200 \
\text { September } & 7,480 & 6,300 \
\text { October } & 8,840 & 7,500 \
\text { November } & 5,800 & 5,800 \
\text { December } & 7,336 & 6,600
\end{array}$$ Andrew Company uses the high?low method to analyze mixed costs.The cost function is stated as _____.

Accepted Answer

A) Y = $440 + $1.12X 
B) Y = $3,562.30 + $0.144X 
C) Y = $107.20 + $1.416X 
D) Y = $7,850 + $0.132X 
A) Y = $440 + $1.12X 
B) Y = $3,562.30 + $0.144X 
C) Y = $107.20 + $1.416X 
D) Y = $7,850 + $0.132X

Question 13

Which statement regarding committed and discretionary fixed costs is true?

Accepted Answer

A) Discretionary fixed costs preserve management's flexibility. 
B) Committed fixed costs preserve management's flexibility. 
C) Both discretionary and committed fixed costs preserve flexibility. 
D) Both discretionary and committed fixed costs limit flexibility. 
A) Discretionary fixed costs preserve management's flexibility. 
B) Committed fixed costs preserve management's flexibility. 
C) Both discretionary and committed fixed costs preserve flexibility. 
D) Both discretionary and committed fixed costs limit flexibility.

Question 14

Snead Inc.currently produces 120,000 units at a cost of $400,000.Next year Snead Inc.expects to produce 145,000 units.Snead's relevant range is 100,000 to 150,000 units.If the cost is fixed and 145,000 units are produced, the fixed cost _____.

Accepted Answer

A) will stay the same 
B) will increase to $460,000 
C) will decrease 
D) will be indeterminate 
A) will stay the same 
B) will increase to $460,000 
C) will decrease 
D) will be indeterminate

Question 15

Variable cost per unit is the slope of a total cost line.

Accepted Answer

A) True 
 B)False

Question 16

A cost function _____.

Accepted Answer

A) need not have a cause?and?effect relationship 
B) should include only personal observations of costs and activities 
C) does not explain past cost behavior 
D) should be a reliable predictor of future costs 
A) need not have a cause?and?effect relationship 
B) should include only personal observations of costs and activities 
C) does not explain past cost behavior 
D) should be a reliable predictor of future costs

Question 17

______ is the application of cost measures to expected future activity levels to forecast future costs.

Accepted Answer

A) Activity analysis 
B) Cost prediction 
C) Measurement of cost behavior 
D) A cost function 
A) Activity analysis 
B) Cost prediction 
C) Measurement of cost behavior 
D) A cost function

Question 18

Activity analysis is used to identify appropriate cost drivers and their effects on the costs of making a product or providing a service.

Accepted Answer

A) True 
 B)False

Question 19

_____ have no obvious relationship to levels of output activity, but are determined as part of the periodic planning process.

Accepted Answer

A) Discretionary fixed costs 
B) Committed fixed costs 
C) Capacity costs 
D) Engineered costs 
A) Discretionary fixed costs 
B) Committed fixed costs 
C) Capacity costs 
D) Engineered costs

Question 20

Costs that may be essential to the long-run achievement of the organization's goals, but that managers can almost reduce to zero in the short-run, are called _____.

Accepted Answer

A) engineered costs 
B) mixed costs 
C) committed fixed costs. 
D) discretionary fixed costs 
A) engineered costs 
B) mixed costs 
C) committed fixed costs. 
D) discretionary fixed costs

A lump sum amount of research and development planned for Senko Corporation would most likely be identified as a_____.

Committed fixed costs can be altered by management if management decides that different levels of spending are desirable.

Bush Motel's cost function based on guest-days of occupancy for custodial cost is given as: Y = $60,000 + $4.50X.Bush Motel expects an occupancy level of 8,000 guest days.Bush Motel's expected total variable cost is:

Least-squares regression is a reliable method of cost estimation.

Insomniac Hotel's cost function based on guest-days of occupancy for custodial cost is given as: Y = $60,000 + $10.00X.Insomniac Hotel expects an occupancy level of 15,000 guest days.Insomniac Hotel's expected total cost is _____.

Merkey Motel's cost function based on guest-days of occupancy for custodial cost is given as: Y = $50,000 + $7.50X.Merkey Motel expects an occupancy level of 10,000 guest days.Merkey Motel's expected total fixed cost is _____.

In the mixed?cost function, Y = $72,000 + $7.70X, the $72,000 stands for _____.

It may be difficult to trace cost to products and services if the costs are ?____.

The application of cost measures to expected future activity levels to forecast future costs

One of the simplest methods to measure a linear cost function from past data is the _____.

_____ is the first step in estimating or predicting costs as a function of appropriate cost drivers.

Which statement regarding committed and discretionary fixed costs is true?

Snead Inc.currently produces 120,000 units at a cost of $400,000.Next year Snead Inc.expects to produce 145,000 units.Snead's relevant range is 100,000 to 150,000 units.If the cost is fixed and 145,000 units are produced, the fixed cost _____.

Variable cost per unit is the slope of a total cost line.

A cost function _____.

______ is the application of cost measures to expected future activity levels to forecast future costs.

Activity analysis is used to identify appropriate cost drivers and their effects on the costs of making a product or providing a service.

_____ have no obvious relationship to levels of output activity, but are determined as part of the periodic planning process.

Costs that may be essential to the long-run achievement of the organization's goals, but that managers can almost reduce to zero in the short-run, are called _____.

Managerial Accounting, the Business Organization, and Professional Ethics

Introduction to Cost Behavior and Cost-Volume Relationships

Cost Management Systems and an Introduction to Activity-Based Costing

Relevant Information and Decision Making With a Focus on Pricing Decisions

Relevant Information and Decision Making: Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Costing and Process-Costing Systems

Basic Accounting: Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 3: Measurement of Cost Behavior

A lump sum amount of research and development planned for Senko Corporation would most likely be identified as a_____.

Committed fixed costs can be altered by management if management decides that different levels of spending are desirable.

Bush Motel's cost function based on guest-days of occupancy for custodial cost is given as: Y = $60,000 + $4.50X.Bush Motel expects an occupancy level of 8,000 guest days.Bush Motel's expected total variable cost is:

Least-squares regression is a reliable method of cost estimation.

Insomniac Hotel's cost function based on guest-days of occupancy for custodial cost is given as: Y = $60,000 + $10.00X.Insomniac Hotel expects an occupancy level of 15,000 guest days.Insomniac Hotel's expected total cost is _____.

Merkey Motel's cost function based on guest-days of occupancy for custodial cost is given as: Y = $50,000 + $7.50X.Merkey Motel expects an occupancy level of 10,000 guest days.Merkey Motel's expected total fixed cost is _____.

In the mixed?cost function, Y = $72,000 + $7.70X, the $72,000 stands for _____.

It may be difficult to trace cost to products and services if the costs are ?____.

The application of cost measures to expected future activity levels to forecast future costs

One of the simplest methods to measure a linear cost function from past data is the _____.

_____ is the first step in estimating or predicting costs as a function of appropriate cost drivers.

Which statement regarding committed and discretionary fixed costs is true?

Snead Inc.currently produces 120,000 units at a cost of $400,000.Next year Snead Inc.expects to produce 145,000 units.Snead's relevant range is 100,000 to 150,000 units.If the cost is fixed and 145,000 units are produced, the fixed cost _____.

Variable cost per unit is the slope of a total cost line.

A cost function _____.

______ is the application of cost measures to expected future activity levels to forecast future costs.

Activity analysis is used to identify appropriate cost drivers and their effects on the costs of making a product or providing a service.

_____ have no obvious relationship to levels of output activity, but are determined as part of the periodic planning process.

Costs that may be essential to the long-run achievement of the organization's goals, but that managers can almost reduce to zero in the short-run, are called _____.

Managerial Accounting, the Business Organization, and Professional Ethics

Introduction to Cost Behavior and Cost-Volume Relationships

Cost Management Systems and an Introduction to Activity-Based Costing

Relevant Information and Decision Making With a Focus on Pricing Decisions

Relevant Information and Decision Making: Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Costing and Process-Costing Systems

Basic Accounting: Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters