Exam 2: Cost Behavior, Activity Analysis, and Cost Estimation

Changes in technology during the period of cost observations should not be a concern in estimating cost.

The following procedure performed by a candy manufacturer is the best example of a product level activity within a manufacturing cost hierarchy:

Fixed costs do not respond to:

Assume RCA Cable Company has the following information available about fleet miles and operating costs for its service department: Using the high-low method, develop a cost-estimating equation for total annual operating costs.

Rock Bottom's Brew is a successful brewery engaged in the development and production of specialty micro brews. It uses manufacturing cost hierarchy to allocate costs to various activities. During the past year, it has incurred: -Using the manufacturing cost hierarchy, what is the total cost that would be classified as product-level activity costs?

The following procedure performed by a home oil delivery company is the best example of a unit level activity within a customer cost hierarchy:

Rock Bottom's Brew is a successful brewery engaged in the development and production of specialty micro brews. It uses manufacturing cost hierarchy to allocate costs to various activities. During the past year, it has incurred: -Using the manufacturing cost hierarchy, what is the total cost that would be classified as unit-level activity costs?

Given the equation, Y= 4,000 + 2.5X. The coefficient of determination (R-Squared) is calculated to be 0.70 (or 70%). This equation implies

Kratz Manufacturing Company uses an activity-based costing system. It has the following manufacturing activity areas, related cost drivers and cost allocation rates: During the month, 100 units were produced, with no defects, requiring three setups. Each unit consisted of 17 parts, 3 direct labor hours and 2.5 machine hours. Direct materials cost $50 per finished unit. -What is the total manufacturing cost for materials handling?

In cost estimation:

Which one of the following statements about difficulties of cost estimation is true?

The cost of product marketing such as advertising would best be classified as what type of activity?

The following data was input into a spreadsheet program to determine the Intercept, Slope and R² (RSQ) for Patient Days and Maintenance Costs for a local hospital: -The coefficient of determination for the estimated cost model for maintenance is represented by:

Preparing the engineering design and preparing tools to make a new product added to a company's product line would be a good example of a batch level activity.

The following data was input into a spreadsheet program to determine the Intercept, Slope and R² (RSQ) for Patient Days and Maintenance Costs for a local hospital: -The estimated total maintenance cost for August based on an estimated 4,000 patient days is:

Office Supply store costs are expressed as a function of the unit sales of its two products: office chairs and task desks. Assume fixed costs are $9,000 per month and the variable costs are $60 per office chair and $125 per task desk. What are Office Supply's estimated costs for the month if 100 office chairs and 52 task desks are sold?

Which of the following mathematical expressions best describes a mixed cost?

The primary advantage of the high-low method of cost estimation over the least-squares regression method is its Limited data requirements.

In cost estimation:

The number of units sold is a better independent variable than square feet of all manufacturing facilities in estimating the cost function of a headphone manufacturer.