Question 1

A cost that changes in total as output changes is a variable cost.

Accepted Answer

A) True 
 B)False

Question 2

Using the high-low method, the variable rate of a mixed cost equals

Accepted Answer

A)  total cost at high point - (variable rate *output at high point) 
B)  total cost at high point -(variable rate *output at low point) 
C)   
D)   
A)  total cost at high point - (variable rate *output at high point) 
B)  total cost at high point -(variable rate *output at low point) 
C)   
D)

Question 3

Select the appropriate item for each of the definitions listed below.
a.
relevant range
b.
cost behavior
c.
driver
d.
variable cost
e.
fixed cost
-total cost depends on the level of output

Accepted Answer

The answer of Select the appropriate item for each of...

Question 4

Rental expense for a warehouse is an example of a ___________ cost.

Accepted Answer

The answer of Rental expense for a warehouse is an...

Question 5

Figure 3-1.
Total cost = Fixed cost + (Variable Rate * Output)
-Refer to Figure 3-1. In the cost formula above which element would be the intercept?

Accepted Answer

A)  fixed cost 
B)  total cost 
C)  output 
D)  variable rate 
A)  fixed cost 
B)  total cost 
C)  output 
D)  variable rate

Question 6

The scatter-graph method

Accepted Answer

A)  displays a constant level of cost for a range of output. 
B)  has the advantage of subjectivity. 
C)  may reveal the presence of outliers. 
D)  all of these are correct 
A)  displays a constant level of cost for a range of output. 
B)  has the advantage of subjectivity. 
C)  may reveal the presence of outliers. 
D)  all of these are correct

Question 7

Grindgood Company operates a chain of cozy coffee shops. The company's chief executive officer is interested in accumulating some information on the overhead costs incurred by the company. You have been asked to analyze the following six months worth of data.
   Required:

Accepted Answer

The answer of Grindgood Company operates a chain of cozy...

Question 8

Select the appropriate type of cost for each of the definitions listed below.
a.
variable
b.
fixed
c.
mixed
d.
step
-remains constant on a per-unit basis within the relevant range

Accepted Answer

The answer of Select the appropriate type of cost for...

Question 9

The high-low method is an objective method to separate the cost behavior of a mixed cost.

Accepted Answer

A) True 
 B)False

Question 10

Figure 3-14.
Blacken Company manufactures motorcycles. The company's management accountant wants to calculate the fixed and variable costs associated with utility cost incurred by the factory. Data for the past five months were collected.
  
-Refer to Figure 3-14. Using a regression program, the forecasted utility cost at 2,550 machine hours (rounded to the nearest dollar) is

Accepted Answer

A)  $28,288. 
B)  $37,116. 
C)  $33,147. 
D)  $10,631. 
A)  $28,288. 
B)  $37,116. 
C)  $33,147. 
D)  $10,631.

Question 11

Select the appropriate item for each of the definitions listed below.
a.
committed fixed cost
b.
discretionary fixed cost
c.
mixed cost
d.
step cost
-can be changed by management

Accepted Answer

The answer of Select the appropriate item for each of...

Question 12

Hipcuts Company operates a chain of trendy beauty salons. The company's chief executive officer is interested in accumulating some information on the overhead costs incurred by the company. You have been asked to analyze the following six months worth of data.
   A regression analysis produced the following coefficients.
   Required:

Accepted Answer

The answer of Hipcuts Company operates a chain of trendy...

Question 13

Spangle Company constructed the following cost formula for its monthly maintenance cost.
Total monthly maintenance cost = $9,000 + ($1.75 * no. machine hours)
Required:

Accepted Answer

The answer of Spangle Company constructed the following cost formula...

Question 14

Figure 3-14.
Blacken Company manufactures motorcycles. The company's management accountant wants to calculate the fixed and variable costs associated with utility cost incurred by the factory. Data for the past five months were collected.
  
-Refer to Figure 3-14. Using a regression program, the forecasted utility cost at 2,300 machine hours (rounded to the nearest dollar) is

Accepted Answer

A)  $30,940. 
B)  $37,116. 
C)  $25,945. 
D)  $10,631. 
A)  $30,940. 
B)  $37,116. 
C)  $25,945. 
D)  $10,631.

Question 15

Select the appropriate type of fixed cost for each cost listed below.
a.
discretionary
b.
committed
-rent of building

Accepted Answer

The answer of Select the appropriate type of fixed cost...

Question 16

A driver is a factor that causes or leads to a change in a cost.

Accepted Answer

A) True 
 B)False

Question 17

The relevant range

Accepted Answer

A)  is the normal range of output. 
B)  is the range of output where cost relationships are valid. 
C)  may change from period to period. 
D)  All of these are correct. 
A)  is the normal range of output. 
B)  is the range of output where cost relationships are valid. 
C)  may change from period to period. 
D)  All of these are correct.

Question 18

Figure 3-5.
Maxwell Company makes treadmills. The company controller wants to calculate the fixed and variable costs associated with the janitorial costs incurred in the factory. Data for the past four months were collected.
  
-Refer to Figure 3-5. Using the high-low method calculate the fixed cost of the janitorial services

Accepted Answer

A)  $4,080 
B)  $7,320 
C)  $6,120 
D)  none of these are correct 
A)  $4,080 
B)  $7,320 
C)  $6,120 
D)  none of these are correct

Question 19

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer.
a.
variable
b.
fixed
-factory supervisor's salary

Accepted Answer

The answer of Select the appropriate cost behavior for the...

Question 20

Select the appropriate type of fixed cost for each cost listed below.
a.
discretionary
b.
committed
-depreciation

Accepted Answer

The answer of Select the appropriate type of fixed cost...

A cost that changes in total as output changes is a variable cost.

Using the high-low method, the variable rate of a mixed cost equals

Select the appropriate item for each of the definitions listed below. a. relevant range b. cost behavior c. driver d. variable cost e. fixed cost -total cost depends on the level of output

Rental expense for a warehouse is an example of a ___________ cost.

Figure 3-1. Total cost = Fixed cost + (Variable Rate * Output) -Refer to Figure 3-1. In the cost formula above which element would be the intercept?

The scatter-graph method

Grindgood Company operates a chain of cozy coffee shops. The company's chief executive officer is interested in accumulating some information on the overhead costs incurred by the company. You have been asked to analyze the following six months worth of data. Required:

Select the appropriate type of cost for each of the definitions listed below. a. variable b. fixed c. mixed d. step -remains constant on a per-unit basis within the relevant range

The high-low method is an objective method to separate the cost behavior of a mixed cost.

Select the appropriate item for each of the definitions listed below. a. committed fixed cost b. discretionary fixed cost c. mixed cost d. step cost -can be changed by management

Spangle Company constructed the following cost formula for its monthly maintenance cost. Total monthly maintenance cost = $9,000 + ($1.75 * no. machine hours) Required:

Select the appropriate type of fixed cost for each cost listed below. a. discretionary b. committed -rent of building

A driver is a factor that causes or leads to a change in a cost.

The relevant range

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer. a. variable b. fixed -factory supervisor's salary

Select the appropriate type of fixed cost for each cost listed below. a. discretionary b. committed -depreciation

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 3: Cost Behavior

A cost that changes in total as output changes is a variable cost.

Using the high-low method, the variable rate of a mixed cost equals

Select the appropriate item for each of the definitions listed below. a. relevant range b. cost behavior c. driver d. variable cost e. fixed cost -total cost depends on the level of output

Rental expense for a warehouse is an example of a ___________ cost.

Figure 3-1. Total cost = Fixed cost + (Variable Rate * Output) -Refer to Figure 3-1. In the cost formula above which element would be the intercept?

The scatter-graph method

Grindgood Company operates a chain of cozy coffee shops. The company's chief executive officer is interested in accumulating some information on the overhead costs incurred by the company. You have been asked to analyze the following six months worth of data. Required:

Select the appropriate type of cost for each of the definitions listed below. a. variable b. fixed c. mixed d. step -remains constant on a per-unit basis within the relevant range

The high-low method is an objective method to separate the cost behavior of a mixed cost.

Select the appropriate item for each of the definitions listed below. a. committed fixed cost b. discretionary fixed cost c. mixed cost d. step cost -can be changed by management

Spangle Company constructed the following cost formula for its monthly maintenance cost. Total monthly maintenance cost = $9,000 + ($1.75 * no. machine hours) Required:

Select the appropriate type of fixed cost for each cost listed below. a. discretionary b. committed -rent of building

A driver is a factor that causes or leads to a change in a cost.

The relevant range

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer. a. variable b. fixed -factory supervisor's salary

Select the appropriate type of fixed cost for each cost listed below. a. discretionary b. committed -depreciation

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters