Exam 3: Measurement of Cost Behavior

Costs arising from the possession of facilities, equipment, and a basic organization are ____.

The Alice Corporation used regression analysis to predict the annual cost of indirect materials.The results were as follows: Indirect Materials Cost Explained by Units Produced Constant \ 21,885 Standard error of Y estimate \ 4,560 R - squared 0.6732 No. of observations 22 Degrees of freedom 20 X coefficients) 8.75 Standard error of coefficients) 9.1876 The coefficient of determination is_____.

Cost measurement is estimating or predicting costs as a function of appropriate cost drivers.

The account analysis method of measuring cost behavior is objective.

In a mixed-cost function, the slope is the _____.

The Rockford Company used regression analysis to predict the annual cost of utilities. The results were as follows: Utilities Cost Explained by Direct Labor Hours Constant \ 2,500 Standard error of Y estimate \ 595.20 R - squared 0.8650 No. of observations 30 Degrees of freedom 28 X coefficients) 2.037 Standard error of coefficients) 0.917 The total fixed cost is ____.

In a mixed-cost function, the intercept is _____.

_____ measures how much of the fluctuation of a cost is explained by changes in the cost driver.

A final product or service has only one cost driver.

The first step in estimating or predicting costs is cost measurement.

Managers can vary spending levels broadly in the short run.

A measurement of how much of the fluctuation of a cost is explained by changes in the cost driver is _____.

Pertaining to a useful cost function, plausibility means whether you can rely upon the cost function.

In a regression analysis, the constant is a measure of reliability.

Managers use this to identify appropriate cost drivers and their effects on the costs of making a product or providing a service

In a cost function equation, the cost to be explained is the independent variable.

_____ is a method of approximating cost functions.

An algebraic equation used by managers to describe the relationship between a cost and its cost drivers) is called a _____.

The following three data points appear to be _____. Units Costs 100 \ 400 120 480 140 560

Companies cannot recover fixed capacity costs when demand falls during an economic downturn.