The Stanford Company incurred the following maintenance cost during a five month period: $\begin{array}{ccc}\text { Month } &\text { Production Volume } &\text {Maintenance Costs }\\\hline \text { June } & 75 & \$ 250 \\ \text { July } & 115 & 310 \\ \text { August } & 190 & 400 \\ \text { September } & 60 & 240 \\ \text { October } & 135 & 355 \end{array}$ Using a computer or calculator, compute the estimate of variable cost per unit of production Using the method of least squares. Rounded to two decimal places, this value would be

A) $3.21. B) $2.70. C) $1.31. D) $1.23. A) $3.21. B) $2.70. C) $1.31. D) $1.23. C

The following computer printout estimated overhead costs using multiple regression: \[\begin{array} { l c c c c } \text { Parameter } & \text { Estimate } & \begin{array} { c } \text { tfor H(0) } \\ \text { Interameter } = \mathbf { 0 } \end{array} & \underline { \mathbf { P r } > \mathbf { t } } & \begin{array} { c } \text { Std. error } \\ \text { of parameter } \end{array} \\ \text { Intercept } & 1000 & 1.96 & 0.0250 & 510.204 \\ \text { Setup hours } & 25 & 81.96 & 0.0001 & 0.305 \\ \text { \# of parts } & 100 & 9.50 & 0.0001 & 10.527 \end{array}\] $\begin{array}{ll} \text { R Square (R2) } & 0.94 \\ \text { Standard Error (Se) } & 75.00 \\ \text { Observations } & 160 \end{array}$ During the year the company used 1,000 setup hours and 500 parts. What is the predicted overhead cost?

A) $2,500 B) $75,000 C) $76,000 D) none of these A) $2,500 B) $75,000 C) $76,000 D) none of these C

The Stanford Company incurred the following maintenance cost during a five month period: $\begin{array}{ccc}\text { Month } & \text { Production Volume } & \text {Maintenance Costs }\\\hline \text { June } & 75 & \$ 250 \\ \text { July } & 115 & 310 \\ \text { August } & 190 & 400 \\ \text { September } & 60 & 240 \\ \text { October } & 135 & 355 \end{array}$ Using a computer or calculator, compute the estimate of the fixed portion of maintenance costs using the method of least squares. Rounded to dollars, this value would be

A) $575 B) $166 C) $160 D) $66 A) $575 B) $166 C) $160 D) $66

The following computer printout estimated overhead costs using multiple regression: \[\begin{array} { l c c c c } \text { Parameter } & \text { Estimate } & \begin{array} { c } \text { tfor H(0) } \\ \text { Interameter } = \mathbf { 0 } \end{array} & \underline { \mathbf { P r } > \mathbf { t } } & \begin{array} { c } \text { Std. error } \\ \text { of parameter } \end{array} \\ \text { Intercept } & 1000 & 1.96 & 0.0250 & 510.204 \\ \text { Setup hours } & 25 & 81.96 & 0.0001 & 0.305 \\ \text { \# of parts } & 100 & 9.50 & 0.0001 & 10.527 \end{array}\] $\begin{array}{ll} \text { R Square (R2) } & 0.94 \\ \text { Standard Error (Se) } & 75.00 \\ \text { Observations } & 160 \end{array}$ During the year the company used 1,000 setup hours and 500 parts. Which slope and intercept parameters are significant at the 0.05 level?

A) intercept B) setup hours C) number of parts D) all of the above A) intercept B) setup hours C) number of parts D) all of the above

Exam 3: Cost Behavior

The Stanford Company incurred the following maintenance cost during a five month period: Month Production Volume Maintenance Costs June 75 \ 250 July 115 310 August 190 400 September 60 240 October 135 355 Using a computer or calculator, compute the estimate of variable cost per unit of production Using the method of least squares. Rounded to two decimal places, this value would be

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

C

The following computer printout estimated overhead costs using multiple regression: Parameter Estimate tfor H(0) Interameter = Std. error of parameter Intercept 1000 1.96 0.0250 510.204 Setup hours 25 81.96 0.0001 0.305 \# of parts 100 9.50 0.0001 10.527 R Square (R2) 0.94 Standard Error (Se) 75.00 Observations 160 During the year the company used 1,000 setup hours and 500 parts. What is the predicted overhead cost?

Free

(Multiple Choice)

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Question 2

Correct Answer:

Verified

C

Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that is parallel to the horizontal axis?

Free

(Multiple Choice)

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Question 3

Correct Answer:

Verified

D

Whenever least squares is used to fit an equation involving two or more independent variables, the method is called multiple regression.

(True/False)

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Question 4

Methods of estimating costs used by companies include the industrial engineering method, the account analysis method, and the instant decision method.

(True/False)

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Question 5

Direct material cost is $15,000 when 3,000 units are produced. What is the direct material cost when 1,500 units produced?

(Multiple Choice)

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Question 6

If production volume increases from 16,000 to 20,000 units,

(Multiple Choice)

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Question 7

The three widely used quantitative methods of separating a mixed cost into its fixed and variable components are the high-low method, the scatter plot method, and the method of least squares.

(True/False)

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Question 8

Multiple regression has _ or _ independent variables.

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Question 9

Which of the following is an example of a step-fixed cost?

(Multiple Choice)

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Question 10

Which ofthe following is true about the hypothesis test of cost parameters?

(Multiple Choice)

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Question 11

The Stanford Company incurred the following maintenance cost during a five month period: Month Production Volume Maintenance Costs June 75 \ 250 July 115 310 August 190 400 September 60 240 October 135 355 Using a computer or calculator, compute the estimate of the fixed portion of maintenance costs using the method of least squares. Rounded to dollars, this value would be

(Multiple Choice)

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Question 12

A company usually processes 20,000 orders at a total cost of $250,000. During the year, only 10,000 orders were processed. What is the cost of unused activity?

(Multiple Choice)

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Question 13

The _____ is used to estimate costs by classifying accounts in the general ledger as fixed, variable, or mixed.

(Multiple Choice)

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Question 14

The industrial engineering method is used to determine which activities, and in what amounts, are necessary to complete a process.

(True/False)

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Question 15

In the formula Y = F + VX, total variable cost is represented by:

(Multiple Choice)

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Question 16

Mixed costs are costs that have both a fixed and a variable component.

(True/False)

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Question 17

The following computer printout estimated overhead costs using multiple regression: Parameter Estimate tfor H(0) Interameter = Std. error of parameter Intercept 1000 1.96 0.0250 510.204 Setup hours 25 81.96 0.0001 0.305 \# of parts 100 9.50 0.0001 10.527 R Square (R2) 0.94 Standard Error (Se) 75.00 Observations 160 During the year the company used 1,000 setup hours and 500 parts. Which slope and intercept parameters are significant at the 0.05 level?

(Multiple Choice)

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Question 18

Which of the following decision-making tools would NOT be useful in determining the slope and intercept of a mixed cost?

(Multiple Choice)

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Question 19

The drivers that explain changes in costs as units produced change are called:

(Multiple Choice)

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Question 20

Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that is parallel to the horizontal axis?

Whenever least squares is used to fit an equation involving two or more independent variables, the method is called multiple regression.

Methods of estimating costs used by companies include the industrial engineering method, the account analysis method, and the instant decision method.

Direct material cost is $15,000 when 3,000 units are produced. What is the direct material cost when 1,500 units produced?

If production volume increases from 16,000 to 20,000 units,

The three widely used quantitative methods of separating a mixed cost into its fixed and variable components are the high-low method, the scatter plot method, and the method of least squares.

Multiple regression has _ or _ independent variables.

Which of the following is an example of a step-fixed cost?

Which ofthe following is true about the hypothesis test of cost parameters?

A company usually processes 20,000 orders at a total cost of $250,000. During the year, only 10,000 orders were processed. What is the cost of unused activity?

The _____ is used to estimate costs by classifying accounts in the general ledger as fixed, variable, or mixed.

The industrial engineering method is used to determine which activities, and in what amounts, are necessary to complete a process.

In the formula Y = F + VX, total variable cost is represented by:

Mixed costs are costs that have both a fixed and a variable component.

Which of the following decision-making tools would NOT be useful in determining the slope and intercept of a mixed cost?

The drivers that explain changes in costs as units produced change are called:

Introduction to Cost Management

Basic Cost Management Concepts

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 3: Cost Behavior

Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that is parallel to the horizontal axis?

Whenever least squares is used to fit an equation involving two or more independent variables, the method is called multiple regression.

Methods of estimating costs used by companies include the industrial engineering method, the account analysis method, and the instant decision method.

Direct material cost is $15,000 when 3,000 units are produced. What is the direct material cost when 1,500 units produced?

If production volume increases from 16,000 to 20,000 units,

The three widely used quantitative methods of separating a mixed cost into its fixed and variable components are the high-low method, the scatter plot method, and the method of least squares.

Multiple regression has _________ or _________ independent variables.

Which of the following is an example of a step-fixed cost?

Which ofthe following is true about the hypothesis test of cost parameters?

A company usually processes 20,000 orders at a total cost of $250,000. During the year, only 10,000 orders were processed. What is the cost of unused activity?

The _____ is used to estimate costs by classifying accounts in the general ledger as fixed, variable, or mixed.

The industrial engineering method is used to determine which activities, and in what amounts, are necessary to complete a process.

In the formula Y = F + VX, total variable cost is represented by:

Mixed costs are costs that have both a fixed and a variable component.

Which of the following decision-making tools would NOT be useful in determining the slope and intercept of a mixed cost?

The drivers that explain changes in costs as units produced change are called:

Introduction to Cost Management

Basic Cost Management Concepts

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Multiple regression has _ or _ independent variables.