Exam 3: Cost Behavior

_________ are assumed to be the sole drivers of a traditional cost management system.

When Multiple regression is used, the user has a choice of using manual computation or using regression programs.

The level of activity performance where the amount of activity capacity needed corresponds to the level of efficiency required is called the activity capacity.

_________ are those acquired from outside sources where the terms of acquisition do not require any long-term commitments.

Longberry Corporation manufactures and sells party items. The following representative direct labor hours and production costs are provided for a four-month period: Month Direct Labor Hours Production Costs May 3,600 \ 15,000 June 4,800 17,500 July 6,000 20,000 August 4,800 17,500 Total 19,200 \ 70,000 Let A = Fixed production costs per month B = Variable production costs per direct labor hour N = Number of months X = Direct labor hours per month Y = Total monthly production costs S = Summation Using the high-low method, what is the cost formula for estimating costs?

Fixed costs are costs that, in total, are constant within the relevant range as the level of the associated driver varies.

The _________ parameter is the point at which the mixed cost line intercepts the cost (vertical) axis.