Question 1

Which of the following choices denotes the typical cost behavior of advertising and sales commissions?

Accepted Answer

A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D 
E) Choice E 
A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D 
E) Choice E

Question 2

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 lack

Question 3

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 4

During 20x5, Medallion Industries anticipates production of 20,000 units, budgeted variable costs of $85,000, and budgeted ﬁxed costs of $45,000.If 15,000 units are actually produced, what is the expected total cost?

Accepted Answer

A) $130,000 
B) $97,500 
C) $108,750 
D) $118,750 
E) None of these answer choices is correct. 
A) $130,000 
B) $97,500 
C) $108,750 
D) $118,750 
E) None of these answer choices is correct.

Question 5

Which of the following costs changes in direct proportion to a change in the activity level?

Accepted Answer

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

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Gentry Industries has the following information about maintenance costs in the past six months.   How much would Gentry pay if maintenance machine hours are 550?

Accepted Answer

A) $9,600. 
B) $5,150. 
C) $4,900. 
D) $5,100. 
E) None of the answers is correct. 
A) $9,600. 
B) $5,150. 
C) $4,900. 
D) $5,100. 
E) None of the answers is correct.

Question 8

In the least-squares regression method, the cost line is estimated so as to maximize the sum of the squared deviations between the cost line and the data points.

Accepted Answer

A) True 
 B)False

Question 9

Corrine Corporation, which uses least-squares regression analysis, has derived the following regression equation for estimates of manufacturing overhead: Y = 495,000 + 5.65X.Which of the following statements is true if the primary cost driver is machine hours?

Accepted Answer

A) Total manufacturing overhead is represented by the variable "X." 
B) The company anticipates $495,000 of ﬁxed manufacturing overhead. 
C) "X" is commonly known as the dependent variable. 
D) "X" represents the number of machine hours. 
E) The company anticipates $495,000 of ﬁxed manufacturing overhead and "X" represents the number of machine hours. 
A) Total manufacturing overhead is represented by the variable "X." 
B) The company anticipates $495,000 of ﬁxed manufacturing overhead. 
C) "X" is commonly known as the dependent variable. 
D) "X" represents the number of machine hours. 
E) The company anticipates $495,000 of ﬁxed manufacturing overhead and "X" represents the number of machine hours.

Question 10

Polka King Gifts had the following costs in March when 400 ceramic statues were produced: materials, $4,200; labor cost, $1,600; depreciation, $800; rent, $700; and other ﬁxed costs, $500.If production changes to 500 units and production still remains within the relevant range, which of the following costs will stay the same?

Accepted Answer

A) Variable cost per unit 
B) Fixed cost per unit 
C) Total variable cost 
D) Total cost per unit 
E) None of these answer choices is correct. 
A) Variable cost per unit 
B) Fixed cost per unit 
C) Total variable cost 
D) Total cost per unit 
E) None of these answer choices is correct.

Question 11

Volcano Hot Wings has budgeted the following costs for a month in which 12,000 wings will be cooked and sold.   Each wing sells for $1.60 each.What is Volcano Hot Wings' budgeted proﬁt?

Accepted Answer

A) $19,200 
B) $13,200 
C) $8,400 
D) $10,800 
E) None of these answer choices is correct. 
A) $19,200 
B) $13,200 
C) $8,400 
D) $10,800 
E) None of these answer choices is correct.

Question 12

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

Accepted Answer

In the least-squares regression (LSR) me

Question 13

If the Malabar Yacht Club expense includes a rent of $2,000 plus a charge of $40 per member and the club has 80 members,

Accepted Answer

A) ﬁxed costs amount to $2,000 and variable costs amount to $3,200. 
B) ﬁxed costs amount to $3,200 and variable costs amount to $2,000. 
C) all costs are ﬁxed. 
D) all costs are variable. 
E) cannot be determined. 
A) ﬁxed costs amount to $2,000 and variable costs amount to $3,200. 
B) ﬁxed costs amount to $3,200 and variable costs amount to $2,000. 
C) all costs are ﬁxed. 
D) all costs are variable. 
E) cannot be determined.

Question 14

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 15

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 16

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 17

Variable costs change in direct proportion to a change in the activity level.

Accepted Answer

A) True 
 B)False

Which of the following choices denotes the typical cost behavior of advertising and sales commissions?

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

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

During 20x5, Medallion Industries anticipates production of 20,000 units, budgeted variable costs of $85,000, and budgeted ﬁxed costs of $45,000.If 15,000 units are actually produced, what is the expected total cost?

Which of the following costs changes in direct proportion to a change in the activity level?

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

Gentry Industries has the following information about maintenance costs in the past six months. How much would Gentry pay if maintenance machine hours are 550?

In the least-squares regression method, the cost line is estimated so as to maximize the sum of the squared deviations between the cost line and the data points.

Corrine Corporation, which uses least-squares regression analysis, has derived the following regression equation for estimates of manufacturing overhead: Y = 495,000 + 5.65X.Which of the following statements is true if the primary cost driver is machine hours?

Volcano Hot Wings has budgeted the following costs for a month in which 12,000 wings will be cooked and sold. Each wing sells for $1.60 each.What is Volcano Hot Wings' budgeted proﬁt?

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

If the Malabar Yacht Club expense includes a rent of $2,000 plus a charge of $40 per member and the club has 80 members,

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

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

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

Variable costs change in direct proportion to a change in the activity level.

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

Inventory Management and Economic Order Quantity (EOQ) Analysis

Filters

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

Which of the following choices denotes the typical cost behavior of advertising and sales commissions?

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

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

During 20x5, Medallion Industries anticipates production of 20,000 units, budgeted variable costs of $85,000, and budgeted ﬁxed costs of $45,000.If 15,000 units are actually produced, what is the expected total cost?

Which of the following costs changes in direct proportion to a change in the activity level?

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

Gentry Industries has the following information about maintenance costs in the past six months. How much would Gentry pay if maintenance machine hours are 550?

In the least-squares regression method, the cost line is estimated so as to maximize the sum of the squared deviations between the cost line and the data points.

Corrine Corporation, which uses least-squares regression analysis, has derived the following regression equation for estimates of manufacturing overhead: Y = 495,000 + 5.65X.Which of the following statements is true if the primary cost driver is machine hours?

Volcano Hot Wings has budgeted the following costs for a month in which 12,000 wings will be cooked and sold. Each wing sells for $1.60 each.What is Volcano Hot Wings' budgeted proﬁt?

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

If the Malabar Yacht Club expense includes a rent of $2,000 plus a charge of $40 per member and the club has 80 members,

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

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

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

Variable costs change in direct proportion to a change in the activity level.

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

Inventory Management and Economic Order Quantity (EOQ) Analysis

Filters