Question 1

Harnock Company constructed the following cost formula for its monthly janitorial cost.
Total monthly janitorial cost = $5,000 + ($.48 *units of output)
Required:

Accepted Answer

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

Question 2

The average unit cost at a monthly volume of 9,000 units is $3, and the average unit cost at a monthly volume of 22,500 units is $2.10.
Required:

Accepted Answer

The answer of The average unit cost at a monthly...

Question 3

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 six months were collected.
   Required:

Accepted Answer

The answer of Blacken Company manufactures motorcycles. The company's management...

Question 4

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 value of the intercept (rounded to the nearest penny) is

Accepted Answer

A)  $.99. 
B)  $195.35. 
C)  $10,630.80. 
D)  $190,267.00. 
A)  $.99. 
B)  $195.35. 
C)  $10,630.80. 
D)  $190,267.00.

Question 5

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer.
a.
variable
b.
fixed
-cost of rework

Accepted Answer

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

Question 6

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 independent variable?

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 7

Advantages of the method of least squares over the high-low method include all of the following except

Accepted Answer

A)  a statistical method is used to mathematically derive the cost function. 
B)  only two points are used to develop the cost function. 
C)  the squared differences between actual observations and the line (cost function) are minimized. 
D)  All the observations have an effect on the cost function. 
A)  a statistical method is used to mathematically derive the cost function. 
B)  only two points are used to develop the cost function. 
C)  the squared differences between actual observations and the line (cost function) are minimized. 
D)  All the observations have an effect on the cost function.

Question 8

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer.
a.
variable
b.
fixed
-cost of car stereos

Accepted Answer

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

Question 9

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

Accepted Answer

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

Question 10

Figure 3-8.
Martin Company makes cell phones. The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory. Data for the past four months were collected.
   Coefficients shown by a regression program are:
  
-Refer to Figure 3-8. Using the results of regression, calculate the variable rate of the electricity cost.

Accepted Answer

A)  $9.67 per machine hour 
B)  $9.48 per machine hour 
C)  $2,255 per machine hour 
D)  none of these are correct 
A)  $9.67 per machine hour 
B)  $9.48 per machine hour 
C)  $2,255 per machine hour 
D)  none of these are correct

Question 11

"Outliers" are points that seem to fit the general pattern of behavior.

Accepted Answer

A) True 
 B)False

Question 12

A type of cost behavior where the true total cost function is increasing at a decreasing rate is called ______________.

Accepted Answer

The answer of A type of cost behavior where the...

Question 13

The ______________________________ is a statistical way to find the best-fitting line through a set of data points.

Accepted Answer

method of

Question 14

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

Accepted Answer

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

Question 15

A mixed cost

Accepted Answer

A)  will vary in direct proportion to changes in output. 
B)  stays the same regardless of output. 
C)  has the same cost behavior as a step cost. 
D)  will decrease in total when output decreases. 
A)  will vary in direct proportion to changes in output. 
B)  stays the same regardless of output. 
C)  has the same cost behavior as a step cost. 
D)  will decrease in total when output decreases.

Question 16

Tamo Company used an Excel spreadsheet program to run ordinary least squares on a set of cost data for its utility cost. The cost driver for labor cost is employee hours. The following results were produced.
   Required:

Accepted Answer

The answer of Tamo Company used an Excel spreadsheet program...

Question 17

A fixed cost that management can easily decide to increase or decrease is known as a _________________.

Accepted Answer

discretion

Question 18

Figure 3-7.
Margola Company produces hand-held calculators. The company controller wanted to calculate the fixed and variable costs associated with the maintenance cost incurred by the factory. Data for the past four months were collected.
   Coefficients shown by a regression program are:
  
-Refer to Figure 3-7. Using the results of regression, calculate the variable rate of maintenance cost.

Accepted Answer

A)  $1,150 per machine hour 
B)  $12.74 per machine hour 
C)  $9.06 per machine hour 
D)  $12.14 per machine hour 
A)  $1,150 per machine hour 
B)  $12.74 per machine hour 
C)  $9.06 per machine hour 
D)  $12.14 per machine hour

Question 19

The range of output over which the assumed cost relationship is valid for normal operations of a firm is called the

Accepted Answer

A)  mixed range. 
B)  relevant range. 
C)  linear range. 
D)  dependent range. 
A)  mixed range. 
B)  relevant range. 
C)  linear range. 
D)  dependent range.

Question 20

Determining cost behavior is not essential to planning, controlling, and decision making.

Accepted Answer

A) True 
 B)False

Harnock Company constructed the following cost formula for its monthly janitorial cost. Total monthly janitorial cost = $5,000 + ($.48 *units of output) Required:

The average unit cost at a monthly volume of 9,000 units is $3, and the average unit cost at a monthly volume of 22,500 units is $2.10. Required:

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 six months were collected. Required:

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer. a. variable b. fixed -cost of rework

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 independent variable?

Advantages of the method of least squares over the high-low method include all of the following except

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer. a. variable b. fixed -cost of car stereos

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

"Outliers" are points that seem to fit the general pattern of behavior.

A type of cost behavior where the true total cost function is increasing at a decreasing rate is called ______________.

The ______________________________ is a statistical way to find the best-fitting line through a set of data points.

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

A mixed cost

Tamo Company used an Excel spreadsheet program to run ordinary least squares on a set of cost data for its utility cost. The cost driver for labor cost is employee hours. The following results were produced. Required:

A fixed cost that management can easily decide to increase or decrease is known as a _________________.

The range of output over which the assumed cost relationship is valid for normal operations of a firm is called the

Determining cost behavior is not essential to planning, controlling, and decision making.

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

Harnock Company constructed the following cost formula for its monthly janitorial cost. Total monthly janitorial cost = $5,000 + ($.48 *units of output) Required:

The average unit cost at a monthly volume of 9,000 units is $3, and the average unit cost at a monthly volume of 22,500 units is $2.10. Required:

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 six months were collected. Required:

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer. a. variable b. fixed -cost of rework

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 independent variable?

Advantages of the method of least squares over the high-low method include all of the following except

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer. a. variable b. fixed -cost of car stereos

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

"Outliers" are points that seem to fit the general pattern of behavior.

A type of cost behavior where the true total cost function is increasing at a decreasing rate is called ______________.

The ______________________________ is a statistical way to find the best-fitting line through a set of data points.

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

A mixed cost

Tamo Company used an Excel spreadsheet program to run ordinary least squares on a set of cost data for its utility cost. The cost driver for labor cost is employee hours. The following results were produced. Required:

A fixed cost that management can easily decide to increase or decrease is known as a _________________.

The range of output over which the assumed cost relationship is valid for normal operations of a firm is called the

Determining cost behavior is not essential to planning, controlling, and decision making.

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