Question 1

A company observed a decrease in the cost per unit. All other things being equal, which of the following is most likely true?

Accepted Answer

A)  The company is studying a variable cost, and total volume has increased. 
B)  The company is studying a variable cost, and total volume has decreased. 
C)  The company is studying a fixed cost, and total volume has increased. 
D)  The company is studying a fixed cost, and total volume has decreased. 
E)  The company is studying a fixed cost, and total volume has remained constant. 
A)  The company is studying a variable cost, and total volume has increased. 
B)  The company is studying a variable cost, and total volume has decreased. 
C)  The company is studying a fixed cost, and total volume has increased. 
D)  The company is studying a fixed cost, and total volume has decreased. 
E)  The company is studying a fixed cost, and total volume has remained constant.

Question 2

When graphed, a typical variable cost appears as:

Accepted Answer

A)  a horizontal line. 
B)  a vertical line. 
C)  a u-shaped line. 
D)  a diagonal line that slopes downward to the right. 
E)  a diagonal line that slopes upward to the right. 
A)  a horizontal line. 
B)  a vertical line. 
C)  a u-shaped line. 
D)  a diagonal line that slopes downward to the right. 
E)  a diagonal line that slopes upward to the right.

Question 3

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.
-Fulton's variable cost per copy is:

Accepted Answer

A)  $0.040. 
B)  $0.051. 
C)  $0.053. 
D)  $0.056. 
E)  None of the answers is correct. 
A)  $0.040. 
B)  $0.051. 
C)  $0.053. 
D)  $0.056. 
E)  None of the answers is correct.

Question 4

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.
-Fulton's monthly fixed fee is:

Accepted Answer

A)  $80. 
B)  $102. 
C)  $106. 
D)  $112. 
E)  None of the answers is correct. 
A)  $80. 
B)  $102. 
C)  $106. 
D)  $112. 
E)  None of the answers is correct.

Question 5

A review of Parson Corporation's accounting records found that at a volume of 90,000 units, the variable and fixed cost per unit amounted to $8 and $4, respectively. On the basis of this information, what amount of total cost would Parson anticipate at a volume of 85,000 units?

Accepted Answer

A)  $1,020,000. 
B)  $1,040,000. 
C)  $1,060,000. 
D)  $1,080,000. 
E)  None of the answers is correct. 
A)  $1,020,000. 
B)  $1,040,000. 
C)  $1,060,000. 
D)  $1,080,000. 
E)  None of the answers is correct.

Question 6

A variable cost that has a definitive physical relationship to the activity measure is called a (n):

Accepted Answer

A)  discretionary cost. 
B)  engineered cost. 
C)  managed cost. 
D)  programmed cost. 
E)  committed cost. 
A)  discretionary cost. 
B)  engineered cost. 
C)  managed cost. 
D)  programmed cost. 
E)  committed cost.

Question 7

Costs that result from a company's ownership or use of facilities and its basic organizational structure are known as:

Accepted Answer

A)  discretionary fixed costs. 
B)  committed fixed costs. 
C)  discretionary variable costs. 
D)  committed variable costs. 
E)  engineered costs. 
A)  discretionary fixed costs. 
B)  committed fixed costs. 
C)  discretionary variable costs. 
D)  committed variable costs. 
E)  engineered costs.

Question 8

The nonstatistical method of cost estimation that calls for the creation of a scatter diagram is the:

Accepted Answer

A)  least-squares regression method. 
B)  high-low method. 
C)  visual-fit method. 
D)  account analysis method. 
E)  multiple regression method. 
A)  least-squares regression method. 
B)  high-low method. 
C)  visual-fit method. 
D)  account analysis method. 
E)  multiple regression method.

Question 9

Compare and contrast the following types of costs: (1) variable and step-variable and (2) fixed and step-fixed.

Accepted Answer

(1) A variable cost changes in direct pr

Question 10

Amounts spent for charitable contributions are an example of a (n):

Accepted Answer

A)  committed fixed cost. 
B)  committed variable cost. 
C)  discretionary fixed cost. 
D)  discretionary variable cost. 
E)  engineered cost. 
A)  committed fixed cost. 
B)  committed variable cost. 
C)  discretionary fixed cost. 
D)  discretionary variable cost. 
E)  engineered cost.

Question 11

Norman Company pays a sales commission of 4% on each unit sold. If a graph is prepared, with the vertical axis representing per-unit cost and the horizontal axis representing units sold, how would a line that depicts sales commissions be drawn?

Accepted Answer

A)  As a straight diagonal line, sloping upward to the right. 
B)  As a straight diagonal line, sloping downward to the right. 
C)  As a horizontal line. 
D)  As a vertical line. 
E)  As a curvilinear line. 
A)  As a straight diagonal line, sloping upward to the right. 
B)  As a straight diagonal line, sloping downward to the right. 
C)  As a horizontal line. 
D)  As a vertical line. 
E)  As a curvilinear line.

Question 12

Which of the following is not an example of a committed fixed cost?

Accepted Answer

A)  Property taxes. 
B)  Depreciation on buildings. 
C)  Salaries of management personnel. 
D)  Outlays for advertising programs. 
E)  Equipment rental costs. 
A)  Property taxes. 
B)  Depreciation on buildings. 
C)  Salaries of management personnel. 
D)  Outlays for advertising programs. 
E)  Equipment rental costs.

Question 13

A mixed cost is also known as a:

Accepted Answer

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

Question 14

Which of the following statements about the visual-fit method is (are) true?
I. The method results in the creation of a scatter diagram.
II. The method is not totally objective because of the manner in which the cost line is determined.
III. The method is especially helpful in the determination of outliers.

Accepted Answer

A)  I only. 
B)  II only. 
C)  I and II. 
D)  I and III. 
E)  I, II, and III. 
A)  I only. 
B)  II only. 
C)  I and II. 
D)  I and III. 
E)  I, II, and III.

Question 15

Differentiate between committed costs and discretionary costs. Be sure to present two examples of each and explain which of the two cost types would likely be cut should a company encounter financial difficulties.

Accepted Answer

A committed cost is a fixed amount that

Question 16

Multiple regression is a statistical method that estimates a linear (straight-line) relationship between one dependent variable and one independent variable.

Accepted Answer

A) True 
 B)False

Question 17

Use the following information to answer the following QuestionsSwan, Inc. uses the high-low method to analyze cost behavior. The company observed that at 22,000 machine hours of activity, total maintenance costs averaged $33.40 per hour. When activity jumped to 25,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $30.40.
-On the basis of this information, the variable cost per machine hour for Swan was:

Accepted Answer

A)  $8.40. 
B)  $22.00. 
C)  $25.00. 
D)  $30.40. 
E)  $33.40. 
A)  $8.40. 
B)  $22.00. 
C)  $25.00. 
D)  $30.40. 
E)  $33.40.

Question 18

Which of the following would not typically be classified as a discretionary fixed cost?

Accepted Answer

A)  Equipment depreciation. 
B)  Employee development (education) programs. 
C)  Advertising. 
D)  Outlays for research and development. 
E)  Charitable contributions. 
A)  Equipment depreciation. 
B)  Employee development (education) programs. 
C)  Advertising. 
D)  Outlays for research and development. 
E)  Charitable contributions.

Question 19

What type of cost exhibits the behavior shown below?

Accepted Answer

A)  Variable cost. 
B)  Fixed cost. 
C)  Semivariable cost. 
D)  Discretionary fixed cost. 
E)  Step-fixed cost. 
A)  Variable cost. 
B)  Fixed cost. 
C)  Semivariable cost. 
D)  Discretionary fixed cost. 
E)  Step-fixed cost.

Question 20

Brock Morton has a fast-food franchise and must pay a franchise fee of $45,000 plus 4% of gross sales. In terms of cost behavior, the fee is known as a:

Accepted Answer

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

A company observed a decrease in the cost per unit. All other things being equal, which of the following is most likely true?

When graphed, a typical variable cost appears as:

A review of Parson Corporation's accounting records found that at a volume of 90,000 units, the variable and fixed cost per unit amounted to $8 and $4, respectively. On the basis of this information, what amount of total cost would Parson anticipate at a volume of 85,000 units?

A variable cost that has a definitive physical relationship to the activity measure is called a (n):

Costs that result from a company's ownership or use of facilities and its basic organizational structure are known as:

The nonstatistical method of cost estimation that calls for the creation of a scatter diagram is the:

Compare and contrast the following types of costs: (1) variable and step-variable and (2) fixed and step-fixed.

Amounts spent for charitable contributions are an example of a (n):

Norman Company pays a sales commission of 4% on each unit sold. If a graph is prepared, with the vertical axis representing per-unit cost and the horizontal axis representing units sold, how would a line that depicts sales commissions be drawn?

Which of the following is not an example of a committed fixed cost?

A mixed cost is also known as a:

Differentiate between committed costs and discretionary costs. Be sure to present two examples of each and explain which of the two cost types would likely be cut should a company encounter financial difficulties.

Multiple regression is a statistical method that estimates a linear (straight-line) relationship between one dependent variable and one independent variable.

Which of the following would not typically be classified as a discretionary fixed cost?

What type of cost exhibits the behavior shown below?

Brock Morton has a fast-food franchise and must pay a franchise fee of $45,000 plus 4% of gross sales. In terms of cost behavior, the fee is known as a:

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

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

A company observed a decrease in the cost per unit. All other things being equal, which of the following is most likely true?

When graphed, a typical variable cost appears as:

A review of Parson Corporation's accounting records found that at a volume of 90,000 units, the variable and fixed cost per unit amounted to $8 and $4, respectively. On the basis of this information, what amount of total cost would Parson anticipate at a volume of 85,000 units?

A variable cost that has a definitive physical relationship to the activity measure is called a (n):

Costs that result from a company's ownership or use of facilities and its basic organizational structure are known as:

The nonstatistical method of cost estimation that calls for the creation of a scatter diagram is the:

Compare and contrast the following types of costs: (1) variable and step-variable and (2) fixed and step-fixed.

Amounts spent for charitable contributions are an example of a (n):

Norman Company pays a sales commission of 4% on each unit sold. If a graph is prepared, with the vertical axis representing per-unit cost and the horizontal axis representing units sold, how would a line that depicts sales commissions be drawn?

Which of the following is not an example of a committed fixed cost?

A mixed cost is also known as a:

Differentiate between committed costs and discretionary costs. Be sure to present two examples of each and explain which of the two cost types would likely be cut should a company encounter financial difficulties.

Multiple regression is a statistical method that estimates a linear (straight-line) relationship between one dependent variable and one independent variable.

Which of the following would not typically be classified as a discretionary fixed cost?

What type of cost exhibits the behavior shown below?

Brock Morton has a fast-food franchise and must pay a franchise fee of $45,000 plus 4% of gross sales. In terms of cost behavior, the fee is known as a:

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