Question 1

is the application of cost measures to expected future activity levels to forecast future costs.

Accepted Answer

A)  Measurement of cost behavior 
B)  Cost prediction 
C)  A cost function 
D)  Activity analysis 
A)  Measurement of cost behavior 
B)  Cost prediction 
C)  A cost function 
D)  Activity analysis

Question 2

Engineering analysis and account analysis are similar because:

Accepted Answer

A)  both are extremely expensive 
B)  both require the subjective judgment of the analyst 
C)  both focus on past costs 
D)  both focus on future costs 
A)  both are extremely expensive 
B)  both require the subjective judgment of the analyst 
C)  both focus on past costs 
D)  both focus on future costs

Question 3

By their decisions, managers influence cost behavior throughout the entire value chain.

Accepted Answer

A) True 
 B)False

Question 4

The Janice Company has provided the following information: $\begin{array}{lll}
\text { Units of Output }&20,000&32,000\
\text { Direct materials } & \$ 180,000 & \$ 252,000 \
\text { Workers' wages } & 1,080,000 & 1,512,000 \
\text { Supervisors' s al aries } & 312,000 & 312,000 \
\text { Equipment } & 151,200 & 151,200 \
\text { depreciation } & &\\text { Maintenance } & \$ 1,600 & 110,400 \
\text { Utilities } & \underline{384,000} & \underline{528,000} \
\text { Total } & \$ 2,188.800 & \$ 2865.600
\end{array}$ Using the information provided, compute the total cost function and estimate the total cost at 27,000 units of output.

Accepted Answer

Variable cost = ($2,865,600 $2,188,800)

Question 5

The visual- fit method is highly subjective and is more reliable when the cost function of the data is linear.

Accepted Answer

A) True 
 B)False

Question 6

These costs are the fixed costs of being able to achieve a desired level of production or to provide a desired level of service while maintaining product or service attributes, such as quality

Accepted Answer

The answer of These costs are the fixed costs of...

Question 7

An algebraic equation used by managers to describe the relationship between a cost and its cost driver(s)

Accepted Answer

The answer of An algebraic equation used by managers to...

Question 8

Most companies make a capacity decision frequently.

Accepted Answer

A) True 
 B)False

Question 9

A concern with using historical data to measure cost behavior is the possibility that historical data may hide past inefficiencies that the company could reduce if it could identify them.

Accepted Answer

A) True 
 B)False

Question 10

In regression analysis, the fixed- cost measure is labeled the constant or intercept.

Accepted Answer

A) True 
 B)False

Question 11

The following data has been assembled for Zowie Company. Use the high- low method. $$\begin{array} { l l } 
\text { Cost } & \text { Hours } \
\$ 24,400 & 2,000 \
34,000 & 2,600 \
31,280 & 2,450 \
36,400 & 3,000 \
44,160 & 3,900
\end{array}$$ The total cost at an operating level of 2,850 hours is:

Accepted Answer

A)  $25,692 
B)  $34,736 
C)  $32,016 
D)  $33,240 
A)  $25,692 
B)  $34,736 
C)  $32,016 
D)  $33,240

Question 12

Volume- driven costs can be easily traced to products or services.

Accepted Answer

A) True 
 B)False

Question 13

One of the simplest methods to measure a linear cost function from past data is the:

Accepted Answer

A)  visual- fit method 
B)  least- squares regression method 
C)  regression analysis method 
D)  high- low method 
A)  visual- fit method 
B)  least- squares regression method 
C)  regression analysis method 
D)  high- low method

Question 14

These costs arise from the possession of facilities, equipment, and basic organization

Accepted Answer

Committed

Question 15

A lump sum amount of research and development planned for Senko Corporation would most likely be identified as a:

Accepted Answer

A)  mixed cost 
B)  discretionary fixed cost 
C)  step cost 
D)  purely variable cost 
A)  mixed cost 
B)  discretionary fixed cost 
C)  step cost 
D)  purely variable cost

Question 16

Palmer, Inc., currently produces 140,000 units at a cost of $440,000. Next year Palmer, Inc., expects to produce 150,000 units. Palmer's relevant range is 100,000 to 150,000 units. If the cost is fixed and 150,000 units are produced, the fixed cost:

Accepted Answer

A)  will increase to $480,000 
B)  will decrease 
C)  will be indeterminate 
D)  will stay the same 
A)  will increase to $480,000 
B)  will decrease 
C)  will be indeterminate 
D)  will stay the same

Question 17

The visual- fit method of measuring cost behavior only uses two points of data.

Accepted Answer

A) True 
 B)False

Question 18

change abruptly at intervals of activity because the resources and their costs are only available in indivisible chunks.

Accepted Answer

A)  Step costs 
B)  Discretionary fixed costs 
C)  Mixed costs 
D)  Committed fixed costs 
A)  Step costs 
B)  Discretionary fixed costs 
C)  Mixed costs 
D)  Committed fixed costs

Question 19

The use of high technology methods rather than labor usually creates lesser risks for companies with wide variations in demand.

Accepted Answer

A) True 
 B)False

Question 20

Which statement regarding committed and discretionary fixed costs is true?

Accepted Answer

A)  Both discretionary and committed fixed costs preserve flexibility. 
B)  Both discretionary and committed fixed costs limit flexibility. 
C)  Discretionary fixed costs preserve management's flexibility. 
D)  Committed fixed costs preserve management's flexibility. 
A)  Both discretionary and committed fixed costs preserve flexibility. 
B)  Both discretionary and committed fixed costs limit flexibility. 
C)  Discretionary fixed costs preserve management's flexibility. 
D)  Committed fixed costs preserve management's flexibility.

is the application of cost measures to expected future activity levels to forecast future costs.

Engineering analysis and account analysis are similar because:

By their decisions, managers influence cost behavior throughout the entire value chain.

The visual- fit method is highly subjective and is more reliable when the cost function of the data is linear.

These costs are the fixed costs of being able to achieve a desired level of production or to provide a desired level of service while maintaining product or service attributes, such as quality

An algebraic equation used by managers to describe the relationship between a cost and its cost driver(s)

Most companies make a capacity decision frequently.

A concern with using historical data to measure cost behavior is the possibility that historical data may hide past inefficiencies that the company could reduce if it could identify them.

In regression analysis, the fixed- cost measure is labeled the constant or intercept.

The following data has been assembled for Zowie Company. Use the high- low method. Cost Hours \ 24,400 2,000 34,000 2,600 31,280 2,450 36,400 3,000 44,160 3,900 The total cost at an operating level of 2,850 hours is:

Volume- driven costs can be easily traced to products or services.

One of the simplest methods to measure a linear cost function from past data is the:

These costs arise from the possession of facilities, equipment, and basic organization

A lump sum amount of research and development planned for Senko Corporation would most likely be identified as a:

Palmer, Inc., currently produces 140,000 units at a cost of $440,000. Next year Palmer, Inc., expects to produce 150,000 units. Palmer's relevant range is 100,000 to 150,000 units. If the cost is fixed and 150,000 units are produced, the fixed cost:

The visual- fit method of measuring cost behavior only uses two points of data.

change abruptly at intervals of activity because the resources and their costs are only available in indivisible chunks.

The use of high technology methods rather than labor usually creates lesser risks for companies with wide variations in demand.

Which statement regarding committed and discretionary fixed costs is true?

Managerial Accounting and the Business Organization

Introduction to Cost Behavior and Cost Volume Relationships

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Costing

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Basic Accounting Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Filters

Exam 3: Measurement of Cost Behavior

is the application of cost measures to expected future activity levels to forecast future costs.

Engineering analysis and account analysis are similar because:

By their decisions, managers influence cost behavior throughout the entire value chain.

The visual- fit method is highly subjective and is more reliable when the cost function of the data is linear.

These costs are the fixed costs of being able to achieve a desired level of production or to provide a desired level of service while maintaining product or service attributes, such as quality

An algebraic equation used by managers to describe the relationship between a cost and its cost driver(s)

Most companies make a capacity decision frequently.

A concern with using historical data to measure cost behavior is the possibility that historical data may hide past inefficiencies that the company could reduce if it could identify them.

In regression analysis, the fixed- cost measure is labeled the constant or intercept.

The following data has been assembled for Zowie Company. Use the high- low method. Cost Hours \ 24,400 2,000 34,000 2,600 31,280 2,450 36,400 3,000 44,160 3,900 The total cost at an operating level of 2,850 hours is:

Volume- driven costs can be easily traced to products or services.

One of the simplest methods to measure a linear cost function from past data is the:

These costs arise from the possession of facilities, equipment, and basic organization

A lump sum amount of research and development planned for Senko Corporation would most likely be identified as a:

Palmer, Inc., currently produces 140,000 units at a cost of $440,000. Next year Palmer, Inc., expects to produce 150,000 units. Palmer's relevant range is 100,000 to 150,000 units. If the cost is fixed and 150,000 units are produced, the fixed cost:

The visual- fit method of measuring cost behavior only uses two points of data.

change abruptly at intervals of activity because the resources and their costs are only available in indivisible chunks.

The use of high technology methods rather than labor usually creates lesser risks for companies with wide variations in demand.

Which statement regarding committed and discretionary fixed costs is true?

Managerial Accounting and the Business Organization

Introduction to Cost Behavior and Cost Volume Relationships

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Costing

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Basic Accounting Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Filters