Question 1

Select the appropriate cost behavior for each of the costs listed below.
a.
variable
b.
fixed
-raw materials

Accepted Answer

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

Question 2

An advantage of the high-low method is that it is ___________.

Accepted Answer

objective

Question 3

As output decreases fixed costs per unit will increase.

Accepted Answer

A) True 
 B)False

Question 4

Figure 3-3.
Okafor Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected.
  
-Refer to Figure 3-3. Using the high-low method calculate the fixed cost of leasing

Accepted Answer

A)  $482 
B)  $516 
C)  $420 
D)  $456 
A)  $482 
B)  $516 
C)  $420 
D)  $456

Question 5

The percentage of variability in the dependent variable explained by an independent variable is called the ____________________________________.

Accepted Answer

coefficien

Question 6

Select the appropriate type of cost for each of the definitions listed below.
a.
variable
b.
fixed
c.
mixed
d.
step
-total cost = total fixed cost + total variable cost

Accepted Answer

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

Question 7

Figure 3-13.
The following 6 months of data were collected on electricity cost and the number of machine hours in a factory.
  
-Refer to Figure 3-13. An independent variable value used in calculating the cost line using the high-low method is:

Accepted Answer

A)  $27,950 
B)  5,430 
C)  $25,160 
D)  4,000 
A)  $27,950 
B)  5,430 
C)  $25,160 
D)  4,000

Question 8

Just Burn It! Manufactures blank CDs. The company incurs $22,000 in monthly depreciation costs on its manufacturing equipment as well as monthly advertising costs of $2,000 to place ads in newspapers and on the radio. Each CD requires materials and manufacturing overhead resources. On average the company uses 26,000 pounds of material to manufacture 12,000 CDs per month. Each pound of material costs $2.50. The manufacturing overhead is driven by machine hours and on average the company incurs $30,000 in manufacturing overhead to produce 12,000 CDs per month.

Accepted Answer

The answer of Just Burn It! Manufactures blank CDs. The...

Question 9

Figure 3-4.
Botana Company constructed the following formula for monthly utility cost.
Total utility cost = $1,200 + ($8.10* labor hours)
Assume that 775 labor hours are budgeted for the month of April.
-Refer to Figure 3-4. Calculate the total utility cost for the month of April.

Accepted Answer

A)  $7,477.50 
B)  $6,277.50 
C)  $1,200.00 
D)  $5,077.50 
A)  $7,477.50 
B)  $6,277.50 
C)  $1,200.00 
D)  $5,077.50

Question 10

When a mixed cost is graphed the Y-intercept corresponds to the

Accepted Answer

A)  step cost. 
B)  variable rate. 
C)  fixed cost. 
D)  price of the units sold. 
A)  step cost. 
B)  variable rate. 
C)  fixed cost. 
D)  price of the units sold.

Question 11

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 fixed cost of maintenance.

Accepted Answer

A)  $1,150.00 
B)  $978.37 
C)  $9.06 
D)  None of these are correct. 
A)  $1,150.00 
B)  $978.37 
C)  $9.06 
D)  None of these are correct.

Question 12

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, the cost formula for maintenance cost was

Accepted Answer

A)  $1,150 * machine hours 
B)  ($4,686 - $3,956)/(386 -310) 
C)  $9.06 * machine hours 
D)  $1,150 + ($9.06 * machine hours) 
A)  $1,150 * machine hours 
B)  ($4,686 - $3,956)/(386 -310) 
C)  $9.06 * machine hours 
D)  $1,150 + ($9.06 * machine hours)

Question 13

Figure 3-3.
Okafor Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected.
  
-Refer to Figure 3-3. What would Okafor Company's cost formula be to estimate the cost of leasing within the relevant range?

Accepted Answer

A)  total lease cost = $456 + ($38.20* machine hours) 
B)  total lease cost = $516 + ($38.18* machine hours) 
C)  total lease cost = $420 + ($37.25 * machine hours) 
D)  none of these are correct 
A)  total lease cost = $456 + ($38.20* machine hours) 
B)  total lease cost = $516 + ($38.18* machine hours) 
C)  total lease cost = $420 + ($37.25 * machine hours) 
D)  none of these are correct

Question 14

If at a given volume total costs and fixed costs are known, the variable costs per unit may be computed as follows:

Accepted Answer

A)  (total costs - fixed costs)/unit volume 
B)  (total costs/unit volume) - fixed costs 
C)  (total costs * unit volume) -(fixed costs/unit volume) 
D)  total costs -(fixed costs/unit volume) 
A)  (total costs - fixed costs)/unit volume 
B)  (total costs/unit volume) - fixed costs 
C)  (total costs * unit volume) -(fixed costs/unit volume) 
D)  total costs -(fixed costs/unit volume)

Question 15

Computing unit fixed costs may result in misleading information.

Accepted Answer

A) True 
 B)False

Question 16

Select the appropriate cost behavior for each of the costs listed below.
a.
variable
b.
fixed
-factory supplies

Accepted Answer

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

Question 17

A committed fixed cost

Accepted Answer

A)  can easily be changed. 
B)  often involves a long-term contract. 
C)  changes when the level of output changes. 
D)  all of these are correct 
A)  can easily be changed. 
B)  often involves a long-term contract. 
C)  changes when the level of output changes. 
D)  all of these are correct

Question 18

As output increases variable cost per unit will also increase.

Accepted Answer

A) True 
 B)False

Question 19

The high-low method

Accepted Answer

A)  is the most accurate methods. 
B)  is not affected by the presence of outliers. 
C)  has the advantage of objectivity. 
D)  has the advantage of subjectivity. 
A)  is the most accurate methods. 
B)  is not affected by the presence of outliers. 
C)  has the advantage of objectivity. 
D)  has the advantage of subjectivity.

Question 20

Which of the following is an example of a discretionary fixed cost?

Accepted Answer

A)  depreciation of equipment 
B)  advertising costs 
C)  rental of machinery 
D)  insurance on automobiles 
A)  depreciation of equipment 
B)  advertising costs 
C)  rental of machinery 
D)  insurance on automobiles

Select the appropriate cost behavior for each of the costs listed below. a. variable b. fixed -raw materials

An advantage of the high-low method is that it is ___________.

As output decreases fixed costs per unit will increase.

Figure 3-3. Okafor Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected. -Refer to Figure 3-3. Using the high-low method calculate the fixed cost of leasing

The percentage of variability in the dependent variable explained by an independent variable is called the ____________________________________.

Select the appropriate type of cost for each of the definitions listed below. a. variable b. fixed c. mixed d. step -total cost = total fixed cost + total variable cost

Figure 3-13. The following 6 months of data were collected on electricity cost and the number of machine hours in a factory. -Refer to Figure 3-13. An independent variable value used in calculating the cost line using the high-low method is:

Figure 3-4. Botana Company constructed the following formula for monthly utility cost. Total utility cost = $1,200 + ($8.10* labor hours) Assume that 775 labor hours are budgeted for the month of April. -Refer to Figure 3-4. Calculate the total utility cost for the month of April.

When a mixed cost is graphed the Y-intercept corresponds to the

If at a given volume total costs and fixed costs are known, the variable costs per unit may be computed as follows:

Computing unit fixed costs may result in misleading information.

Select the appropriate cost behavior for each of the costs listed below. a. variable b. fixed -factory supplies

A committed fixed cost

As output increases variable cost per unit will also increase.

The high-low method

Which of the following is an example of a discretionary fixed cost?

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

Select the appropriate cost behavior for each of the costs listed below. a. variable b. fixed -raw materials

An advantage of the high-low method is that it is ___________.

As output decreases fixed costs per unit will increase.

Figure 3-3. Okafor Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected. -Refer to Figure 3-3. Using the high-low method calculate the fixed cost of leasing

The percentage of variability in the dependent variable explained by an independent variable is called the ____________________________________.

Select the appropriate type of cost for each of the definitions listed below. a. variable b. fixed c. mixed d. step -total cost = total fixed cost + total variable cost

Figure 3-13. The following 6 months of data were collected on electricity cost and the number of machine hours in a factory. -Refer to Figure 3-13. An independent variable value used in calculating the cost line using the high-low method is:

Figure 3-4. Botana Company constructed the following formula for monthly utility cost. Total utility cost = $1,200 + ($8.10* labor hours) Assume that 775 labor hours are budgeted for the month of April. -Refer to Figure 3-4. Calculate the total utility cost for the month of April.

When a mixed cost is graphed the Y-intercept corresponds to the

If at a given volume total costs and fixed costs are known, the variable costs per unit may be computed as follows:

Computing unit fixed costs may result in misleading information.

Select the appropriate cost behavior for each of the costs listed below. a. variable b. fixed -factory supplies

A committed fixed cost

As output increases variable cost per unit will also increase.

The high-low method

Which of the following is an example of a discretionary fixed cost?

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