Question 1

An important type of nonlinear cost curve is the learning curve, and it:

Accepted Answer

A) tells how tightly the data points cluster around the regression line. 
B) shows how the labor hours worked per unit decrease as the number of units produced increases. 
C) is the percentage of variability in the dependent variable explained by an independent variable. 
D) is an alternative measure of goodness of fit. 
A) tells how tightly the data points cluster around the regression line. 
B) shows how the labor hours worked per unit decrease as the number of units produced increases. 
C) is the percentage of variability in the dependent variable explained by an independent variable. 
D) is an alternative measure of goodness of fit.

Question 2

In a traditional cost management system, cost behavior is assumed to be driven only by

Accepted Answer

A) unit based cost drivers. 
B) non-unit level cost drivers. 
C) activity-based cost drivers. 
D) none of these. 
A) unit based cost drivers. 
B) non-unit level cost drivers. 
C) activity-based cost drivers. 
D) none of these.

Question 3

What does a correlation coefficient near -1 mean?

Accepted Answer

A) Two variables are moving in the opposite direction. 
B) Two variables are moving in the same direction. 
C) Two variables are unrelated. 
D) One variable is not a good predictor of the other. 
A) Two variables are moving in the opposite direction. 
B) Two variables are moving in the same direction. 
C) Two variables are unrelated. 
D) One variable is not a good predictor of the other.

Question 4

A coefficient of determination of 0.91 means

Accepted Answer

A) the two variables move together in the same direction and have a strong relationship. 
B) the parameter is not significant. 
C) the model is significant 91 percent of the time. 
D) that the independent variable explains 91 percent of the cost. 
A) the two variables move together in the same direction and have a strong relationship. 
B) the parameter is not significant. 
C) the model is significant 91 percent of the time. 
D) that the independent variable explains 91 percent of the cost.

Question 5

Which of the following costs is a variable cost?

Accepted Answer

A) materials used in production 
B) research and development 
C) supervisors' salaries 
D) rent 
A) materials used in production 
B) research and development 
C) supervisors' salaries 
D) rent

Question 6

A correlation coefficient near 0 means that two variables are _________.

Accepted Answer

The answer of A correlation coefficient near 0 means that...

Question 7

A company usually processes 20,000 orders at a total cost of $300,000. During the year, only 16,000 orders were processed. What is the cost of resource usage?

Accepted Answer

A) $300,000 
B) $240,000 
C) $30,000 
D) $60,000 
A) $300,000 
B) $240,000 
C) $30,000 
D) $60,000

Question 8

The learning curve that decreases by a constant percentage each time the cumulative quantity doubles is known as the

Accepted Answer

A) cumulative average-time model. 
B) cumulative total-time model. 
C) incremental unit-time model. 
D) decremental average-time model. 
A) cumulative average-time model. 
B) cumulative total-time model. 
C) incremental unit-time model. 
D) decremental average-time model.

Question 9

Marlowe Company currently leases a delivery truck from Burton Enterprises for a fee of $250 per month plus $0.40 per mile. Management is evaluating the desirability of switching to a modern, fuel-efficient truck, which can be leased from Goliath, Inc., for a fee of $600 per month plus $0.05 per mile. All operating costs and fuel are included in the rental fees. In general, a lease from

Accepted Answer

A) Goliath, Inc., is economically preferable to a lease from Burton Enterprises regardless of the monthly use. 
B) Burton Enterprises is economically preferable below 1,000 miles per month. 
C) Burton Enterprises is economically preferable to a lease from Goliath, Inc., regardless of the monthly use. 
D) Burton Enterprises is economically preferable above 1,000 miles per month. 
A) Goliath, Inc., is economically preferable to a lease from Burton Enterprises regardless of the monthly use. 
B) Burton Enterprises is economically preferable below 1,000 miles per month. 
C) Burton Enterprises is economically preferable to a lease from Goliath, Inc., regardless of the monthly use. 
D) Burton Enterprises is economically preferable above 1,000 miles per month.

Question 10

Apparent Corp. has developed the following information on product costs and inventories for a three-month period: $\begin{array}{llll}
&\text { April } & \text { May } & \text { June }\
\text { Finished goods inventory, units: }\
\text { Beginning } & 20 & 25 & 30 \
\text { Manufactured } & \underline{25} & \underline{40} & \underline{35} \
\text { Available } & 45 & 65 & 65 \
\text { Sold } & 25 & 40 & 50 \
\text { Ending } & \underline{20} & \underline{25} & \underline{15}
\end{array}$ Manufacturing costs $4,000 $6,000 $5,500
Based on managerial judgment, the best predictor of manufacturing costs is

Accepted Answer

A) beginning inventory. 
B) units manufactured. 
C) ending inventory. 
D) units available. 
A) beginning inventory. 
B) units manufactured. 
C) ending inventory. 
D) units available.

Question 11

Direct materials are an example of a

Accepted Answer

A) fixed cost. 
B) variable cost. 
C) step cost. 
D) mixed cost. 
A) fixed cost. 
B) variable cost. 
C) step cost. 
D) mixed cost.

Question 12

Salaries paid to shift supervisors are an example of a

Accepted Answer

A) step-variable cost. 
B) mixed cost. 
C) step-fixed cost. 
D) variable cost. 
A) step-variable cost. 
B) mixed cost. 
C) step-fixed cost. 
D) variable cost.

Question 13

Each time cumulative volume doubles, _________ fall by a constant and predictable percentage.

Accepted Answer

The answer of Each time cumulative volume doubles, _________ fall...

Question 14

Multiple regression can be useful to assess cost behavior when dependent variable is affected by only one independent variable.

Accepted Answer

A) True 
 B)False

Question 15

A smaller standard error indicates that:

Accepted Answer

A) the regression line more closely approximates the data. 
B) the regression line and the data are unrelated. 
C) there is negative correlation. 
D) the profitability is increasing at an increasing rate. 
A) the regression line more closely approximates the data. 
B) the regression line and the data are unrelated. 
C) there is negative correlation. 
D) the profitability is increasing at an increasing rate.

Question 16

Sonor Systems undertakes its own machine maintenance. The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour. Last year 275,000 machine hours were used to produce 100,000 units. What is the total maintenance cost per unit produced?

Accepted Answer

A) $0.55 
B) $4.20 
C) $5.50 
D) $5.70 
A) $0.55 
B) $4.20 
C) $5.50 
D) $5.70

Question 17

A cost object is the item for which managers want cost information, so the first step is to determine appropriate cost objects.

Accepted Answer

A) True 
 B)False

Question 18

If a company changes from skilled labor to robots, the previous data are of little value in predicting future costs.

Accepted Answer

A) True 
 B)False

Question 19

If all the activity capacity acquired is not used, this is an example of

Accepted Answer

A) practical capacity. 
B) activity capacity. 
C) unused capacity. 
D) ideal capacity. 
A) practical capacity. 
B) activity capacity. 
C) unused capacity. 
D) ideal capacity.

Question 20

Mixed costs, by definition, contain both

Accepted Answer

A) product and period costs. 
B) fixed and variable costs. 
C) direct and indirect costs. 
D) controllable and noncontrollable costs. 
A) product and period costs. 
B) fixed and variable costs. 
C) direct and indirect costs. 
D) controllable and noncontrollable costs.

An important type of nonlinear cost curve is the learning curve, and it:

In a traditional cost management system, cost behavior is assumed to be driven only by

What does a correlation coefficient near -1 mean?

A coefficient of determination of 0.91 means

Which of the following costs is a variable cost?

A correlation coefficient near 0 means that two variables are _________.

A company usually processes 20,000 orders at a total cost of $300,000. During the year, only 16,000 orders were processed. What is the cost of resource usage?

The learning curve that decreases by a constant percentage each time the cumulative quantity doubles is known as the

Direct materials are an example of a

Salaries paid to shift supervisors are an example of a

Each time cumulative volume doubles, _________ fall by a constant and predictable percentage.

Multiple regression can be useful to assess cost behavior when dependent variable is affected by only one independent variable.

A smaller standard error indicates that:

Sonor Systems undertakes its own machine maintenance. The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour. Last year 275,000 machine hours were used to produce 100,000 units. What is the total maintenance cost per unit produced?

A cost object is the item for which managers want cost information, so the first step is to determine appropriate cost objects.

If a company changes from skilled labor to robots, the previous data are of little value in predicting future costs.

If all the activity capacity acquired is not used, this is an example of

Mixed costs, by definition, contain both

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

An important type of nonlinear cost curve is the learning curve, and it:

In a traditional cost management system, cost behavior is assumed to be driven only by

What does a correlation coefficient near -1 mean?

A coefficient of determination of 0.91 means

Which of the following costs is a variable cost?

A correlation coefficient near 0 means that two variables are _________.

A company usually processes 20,000 orders at a total cost of $300,000. During the year, only 16,000 orders were processed. What is the cost of resource usage?

The learning curve that decreases by a constant percentage each time the cumulative quantity doubles is known as the

Direct materials are an example of a

Salaries paid to shift supervisors are an example of a

Each time cumulative volume doubles, _________ fall by a constant and predictable percentage.

Multiple regression can be useful to assess cost behavior when dependent variable is affected by only one independent variable.

A smaller standard error indicates that:

Sonor Systems undertakes its own machine maintenance. The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour. Last year 275,000 machine hours were used to produce 100,000 units. What is the total maintenance cost per unit produced?

A cost object is the item for which managers want cost information, so the first step is to determine appropriate cost objects.

If a company changes from skilled labor to robots, the previous data are of little value in predicting future costs.

If all the activity capacity acquired is not used, this is an example of

Mixed costs, by definition, contain both

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