Exam 3: Cost Behavior

Knowing how costs change as output changes is essential to

Figure 3-9. The following cost formula was developed using monthly data for a retail clothing store. Total cost = $75,620 + ($242 * number of customers) -Refer to Figure 3-9. The term "number of customers"

__________________ is the general term for describing whether a cost changes when the level of output changes.

The cost accountant for Bolagio Company used an Excel spreadsheet program to run ordinary least squares on a set of cost data for its utility cost. Bolagio's cost driver for utility cost is machine hours. The following results were produced. Required:

Figure 3-2. -Refer to Figure 3-2. What is the materials cost per unit of output?

Select the appropriate item for each of the definitions listed below. a. high-low method b. scatter-graph method c. method of least squares -may reveal the presence of outliers

Cost behavior analysis focuses on

Select the appropriate type of cost for each of the definitions below. a. variable b. fixed c. mixed d. step -has an increased fixed component at specific intervals

A cost __________ is a casual factor that measures the output of the activity that leads costs to change.

Figure 3-6. Taran Company incurred the following costs for the months of January and February. -Refer to Figure 3-6. From the information above we can assume that

Figure 3-10. The following cost formula was developed using the monthly data for an accounting firm. Total cost = $87,100 + ($210 *number of tax returns) -Refer to Figure 3-10. The term $87,100

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 -a description of how a cost changes when the level of output changes

MATCHING Select the appropriate cost behavior for each of the costs listed below. a. variable b. fixed -controller's salary

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer. a. variable b. fixed -depreciation on robotic equipment

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

Which of the following is an advantage of using the scatter-graph method over the high-low method to estimate costs?

Figure 3-2. -Refer to Figure 3-2. The cost behavior of the materials cost is

The fabric used to manufacture curtains is an example of a ____________ cost.

Explain the differences between a variable, fixed, and a mixed cost.

Explain the difference between a committed and a discretionary fixed cost.