Question 1

A forecast of a cost at a particular level of activity is known as:

Accepted Answer

A)  cost estimation. 
B)  cost prediction. 
C)  cost behavior. 
D)  cost analysis. 
E)  cost approximation. 
A)  cost estimation. 
B)  cost prediction. 
C)  cost behavior. 
D)  cost analysis. 
E)  cost approximation.

Question 2

A cost that has both a fixed and variable component is known as a:

Accepted Answer

A)  step-fixed cost. 
B)  step-variable cost. 
C)  semivariable cost. 
D)  curvilinear cost. 
E)  discretionary cost. 
A)  step-fixed cost. 
B)  step-variable cost. 
C)  semivariable cost. 
D)  curvilinear cost. 
E)  discretionary cost.

Question 3

Which of the following methods of cost estimation relies on only two data points?

Accepted Answer

A)  Least-squares regression. 
B)  The high-low method. 
C)  The visual-fit method. 
D)  Account analysis. 
E)  Multiple regression. 
A)  Least-squares regression. 
B)  The high-low method. 
C)  The visual-fit method. 
D)  Account analysis. 
E)  Multiple regression.

Question 4

Costs that remain the same over a wide range of activity, but jump to a different amount outside that range, are known as:

Accepted Answer

A)  step-fixed costs. 
B)  step-variable costs. 
C)  semivariable costs. 
D)  curvilinear costs. 
E)  mixed costs. 
A)  step-fixed costs. 
B)  step-variable costs. 
C)  semivariable costs. 
D)  curvilinear costs. 
E)  mixed costs.

Question 5

Straight-line depreciation is a typical example of a:

Accepted Answer

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

Question 6

Which of the following tools is not associated with cost estimation?

Accepted Answer

A)  Least-squares regression. 
B)  Multiple regression. 
C)  Inversion equations. 
D)  Time and motion (engineering) studies. 
E)  Learning curves. 
A)  Least-squares regression. 
B)  Multiple regression. 
C)  Inversion equations. 
D)  Time and motion (engineering) studies. 
E)  Learning curves.

Question 7

Both the visual-fit and high-low methods of cost estimation have inherent limitations. Briefly identify the major deficiency associated with each method.

Accepted Answer

The visual-fit method suffers from a lac

Question 8

Use the following information to answer the following Questions
Barkoff Enterprises, which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 600 machine hours to a high of 1,100 machine hours, with the following data being available for the first six months of the year:  
-Using the high-low method, the utilities cost for Barkoff associated with 980 machine hours would be:

Accepted Answer

A)  $9,510. 
B)  $9,660. 
C)  $9,700. 
D)  $9,790. 
E)  None of the answers is correct. 
A)  $9,510. 
B)  $9,660. 
C)  $9,700. 
D)  $9,790. 
E)  None of the answers is correct.

Question 9

Which of the following techniques is not used to analyze cost behavior?

Accepted Answer

A)  Least-squares regression. 
B)  High-low method. 
C)  Visual-fit method. 
D)  Linear programming. 
E)  Multiple regression. 
A)  Least-squares regression. 
B)  High-low method. 
C)  Visual-fit method. 
D)  Linear programming. 
E)  Multiple regression.

Question 10

Use the following information to answer the following Questions
Barkoff Enterprises, which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 600 machine hours to a high of 1,100 machine hours, with the following data being available for the first six months of the year:  
-The fixed utilities cost per month for Barkoff is:

Accepted Answer

A)  $3,764. 
B)  $4,400. 
C)  $4,760. 
D)  $5,100. 
E)  None of the answers is correct. 
A)  $3,764. 
B)  $4,400. 
C)  $4,760. 
D)  $5,100. 
E)  None of the answers is correct.

Question 11

Distinguish between least-squares regression and multiple regression as cost estimation methods.

Accepted Answer

In the least-squares regression (LSR) me

Question 12

A committed cost results from a management decision to spend a particular amount of money for some purpose.

Accepted Answer

A) True 
 B)False

Question 13

The following data relate to the Torrence Company for May and August:
 
-
May and August were the lowest and highest activity levels, and Torrence uses the high-low method to analyze cost behavior. If maintenance hours are estimated to be 26,000 hours in October, which of the following statements is true?

Accepted Answer

A)  Total maintenance costs will be $1,175,000. 
B)  Total maintenance costs will be $1,182,000. 
C)  Total maintenance costs will be $1,193,000. 
D)  Total maintenance costs will be $1,221,000. 
E)  Total maintenance costs will be $1,247,000. 
A)  Total maintenance costs will be $1,175,000. 
B)  Total maintenance costs will be $1,182,000. 
C)  Total maintenance costs will be $1,193,000. 
D)  Total maintenance costs will be $1,221,000. 
E)  Total maintenance costs will be $1,247,000.

Question 14

Use the following information to answer the following Questions
Fulton and Sons, Inc. presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Fulton made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.
-How much would Fulton pay if it made 5,500 copies?

Accepted Answer

A)  $382.50. 
B)  $322. 
C)  $300. 
D)  $292.50 
E)  None of the answers is correct. 
A)  $382.50. 
B)  $322. 
C)  $300. 
D)  $292.50 
E)  None of the answers is correct.

Question 15

Committed fixed costs would include:

Accepted Answer

A)  advertising. 
B)  research and development. 
C)  depreciation on buildings and equipment. 
D)  contributions to charitable organizations. 
E)  expenditures for direct labor. 
A)  advertising. 
B)  research and development. 
C)  depreciation on buildings and equipment. 
D)  contributions to charitable organizations. 
E)  expenditures for direct labor.

Question 16

When the engineering method is applied to costs other than labor, it is referred to as the experience method.

Accepted Answer

A) True 
 B)False

Question 17

Mismatched time periods are not issues in the collection of data for cost estimation.

Accepted Answer

A) True 
 B)False

Question 18

Outliers are a common data collection problem.

Accepted Answer

A) True 
 B)False

Question 19

Ralston has the following budgeted costs at its anticipated production level (expressed in hours): variable overhead, $165,000; fixed overhead, $250,000. If Ralston now revises its anticipated production slightly upward, it would expect:

Accepted Answer

A)  total fixed overhead of $250,000 and a lower hourly rate for variable overhead. 
B)  total fixed overhead of $250,000 and the same hourly rate for variable overhead. 
C)  total fixed overhead of $250,000 and a higher hourly rate for variable overhead. 
D)  total variable overhead of less than $165,000 and a lower hourly rate for variable overhead. 
E)  total variable overhead of less than $165,000 and a higher hourly rate for variable overhead. 
A)  total fixed overhead of $250,000 and a lower hourly rate for variable overhead. 
B)  total fixed overhead of $250,000 and the same hourly rate for variable overhead. 
C)  total fixed overhead of $250,000 and a higher hourly rate for variable overhead. 
D)  total variable overhead of less than $165,000 and a lower hourly rate for variable overhead. 
E)  total variable overhead of less than $165,000 and a higher hourly rate for variable overhead.

Question 20

The relevant range is that range of activity where a company achieves its maximum efficiency.

Accepted Answer

A) True 
 B)False

A forecast of a cost at a particular level of activity is known as:

A cost that has both a fixed and variable component is known as a:

Which of the following methods of cost estimation relies on only two data points?

Costs that remain the same over a wide range of activity, but jump to a different amount outside that range, are known as:

Straight-line depreciation is a typical example of a:

Which of the following tools is not associated with cost estimation?

Both the visual-fit and high-low methods of cost estimation have inherent limitations. Briefly identify the major deficiency associated with each method.

Which of the following techniques is not used to analyze cost behavior?

Distinguish between least-squares regression and multiple regression as cost estimation methods.

A committed cost results from a management decision to spend a particular amount of money for some purpose.

Committed fixed costs would include:

When the engineering method is applied to costs other than labor, it is referred to as the experience method.

Mismatched time periods are not issues in the collection of data for cost estimation.

Outliers are a common data collection problem.

Ralston has the following budgeted costs at its anticipated production level (expressed in hours): variable overhead, $165,000; fixed overhead, $250,000. If Ralston now revises its anticipated production slightly upward, it would expect:

The relevant range is that range of activity where a company achieves its maximum efficiency.

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Standard Costing and Analysis of Direct Costs

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Compound Interest and the Concept of Present Value

Inventory Management

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Exam 6: Activity Analysis, Cost Behavior, and Cost Estimation

A forecast of a cost at a particular level of activity is known as:

A cost that has both a fixed and variable component is known as a:

Which of the following methods of cost estimation relies on only two data points?

Costs that remain the same over a wide range of activity, but jump to a different amount outside that range, are known as:

Straight-line depreciation is a typical example of a:

Which of the following tools is not associated with cost estimation?

Both the visual-fit and high-low methods of cost estimation have inherent limitations. Briefly identify the major deficiency associated with each method.

Which of the following techniques is not used to analyze cost behavior?

Distinguish between least-squares regression and multiple regression as cost estimation methods.

A committed cost results from a management decision to spend a particular amount of money for some purpose.

Committed fixed costs would include:

When the engineering method is applied to costs other than labor, it is referred to as the experience method.

Mismatched time periods are not issues in the collection of data for cost estimation.

Outliers are a common data collection problem.

Ralston has the following budgeted costs at its anticipated production level (expressed in hours): variable overhead, $165,000; fixed overhead, $250,000. If Ralston now revises its anticipated production slightly upward, it would expect:

The relevant range is that range of activity where a company achieves its maximum efficiency.

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Standard Costing and Analysis of Direct Costs

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Compound Interest and the Concept of Present Value

Inventory Management

Filters