Exam 3: Cost Behavior

The following information was available about supplies cost for the second quarter of the year: Month Production Volume Supplies Cost July 700 \ 3,185 August 1,600 7,100 September 600 2,700 Using the high-low method, the estimate of supplies cost at 1,000 units of production is

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 maintenance costs at 100 units of production using the method of least squares. This value would be

_________ and _________ studies may be used in conjunction with the industrial engineering method.

Barron Enterprises has the following information about its truck fleet miles and operating costs: Year Miles Operating Costs 2016 400,000 \ 256,000 2017 480,000 280,000 2018 560,000 320,000 What is the best estimate of total costs using the high-low method if the expected fleet mileage for 2018 is 500,000 miles?

_________ are costs incurred that provide long-term activity capacity.

The following computer printout estimated overhead costs using regression: t for H(0) Std. error Parameter Estimate Parameter =0 Pr > of parameter Intercept 100.41 4.81 0.0003 20.88 DLH 14.05 6.78 0.0001 2.07 R Square (R2) 0.80 Standard Error (Se) 25.03 Observations 17 Please find the following statistical table degrees of freed om 90\% 95\% degrees of freedom 1 6.314 12.708 63.657 11 1.796 2.201 3.106 2 2.920 4.303 9.925 12 1.782 2.179 3.055 3 2.353 3.182 5.841 13 1.771 2.160 3.055 4 2.132 2.776 4.604 14 1.761 2.145 3.012 5 2.015 2.571 4.032 15 1.753 2.131 2.947 6 1.943 2.447 3.707 16 1.746 2.120 2.921 7 1.895 2.365 3.499 17 1.740 2.110 2.898 8 1.860 2.306 3.355 18 1.734 2.101 2.878 9 1.833 2.262 3.250 19 1.729 2.093 2.861 10 1.812 2.228 3.169 20 1.725 2.086 2.845 During the last accounting period 10,000 DLH were worked. The coefficient of determination in this model tells us that

The type of resources that are acquired from outside sources, where the terms of acquisition do NOT require any long-term commitment for any given amount of the resource are called:

An equipment lease that specifies a payment of $8,000 per month plus $7 per machine hour used is an example of a

A _________ interval provides a range of values for the actual cost with a prespecified degree of confidence.

A correlation coefficient near +1 means that two variables are moving in the _________ direction.

Based on managerial judgement, the best predictor of manufacturing costs is the units available.

Which of the following statements is TRUE about relevant range?

Hereford Company is planning to introduce a new product with an 80 percent learning rate for production for batches of 1,000 units. The variable labor costs are $30 per unit for the first 1,000-unit batch. Each batch requires 100 hours. There are $10,000 in fixed costs not subject to learning. What is the cumulative average time per batch using the incremental unit-time learning curve for 2,000 units?

Weaknesses of the high-low method include all of the following EXCEPT

Which of the following methods of determining cost behavior uses time and motion studies?

A cost that does not change as output changes is a variable cost, and one that changes is a fixed cost.

In the formula Y = F + VX, X refers to the

The costs incurred for the acquisition of short-run activity capacity, usually as the result of yearly planning are called:

The activity-based resource usage model allows managers to better calculate the changes in resource supply and demand resulting from decisions such as:

A number of cost behavior patterns do not follow a linear pattern, instead, they follow a nonlinear cost curve called the learning curve.