Exam 3: Cost Behavior and Estimation

Mow Power produces and sells custom lawn mowers. Each lawn mower sells for $220 and has a contribution margin of $132 per unit. Monthly fixed costs are $35,200 The cost equation for Mow Power's lawn mowers is

In the regression method, residual refers to the

You are planning a retirement party and have rented space at a capacity of 80 people at a total cost of $800 for the evening. Food is expected to cost $34 per person. Drinks will be provided to attendees at a rate of $8 per drink and each attendee is expected to have on average, two drinks. At capacity, how much total cost will you generate if you charge each attendee $62?

Given the graph shown below, what is the variable cost per unit to be used in the cost equation for the line at 400 units?

ZZZZ Best Accounting and Tax Services pays $300 per month for a tax software license. In addition, for each tax return prepared, the business incurs variable costs of $65 per return. The relevant range for ZZZZ Best Accounting and Tax Services is 100 - 400 tax returns per month. What is the total monthly cost and per unit cost if the business prepares a. 150 returns? b. 200 returns? c. 300 returns?

Visualizing data on a scatter-plot

Anwar Industries has the following activity and cost data for the past year: What will the total cost be when 615 units are produced?

Bentley Baskets is equipped to produce up to 240 basket per month. During June, the company produced as few as 180 baskets at a total cost of $5,400, and in May produced a high for the year of 225 baskets at a total cost of $7,200. What is the monthly relevant range for Bentley Baskets for the past two months?

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change. -Indirect production materials

What are two limitations of the high-low method for predicting future costs?

Which of the following is not an assumption of the regression method?

If a company was to plot its learning curve on a graph with the time per unit and number of units on each axis, one would expect the curve to be

Which of the following is not a method of determining a cost driver?

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change. -Production workers Wages

If Baxter's Barber Shop is able to cut the 1^st customer's hair in 30 minutes, the 2^nd customer's hair in 28.5 minutes, the 4^th customer's hair in 27.08 minutes, and the 8^th customer's hair in 25.72 minutes, what is Baxter's learning curve?

Identify the four assumptions that cause a regression model to be most likely considered reliable.

Chandra Corporation has an observed and documented a learning curve of 90%, and production of units has increased from 10 to 20 units per week. If it is known that it takes 60 minutes to produce the 10^th unit, what amount of time will it take to product the 20^th unit?

Which of the following is the ultimate limitation of the concept of a learning curve?

In applying a linear cost approach as compared to a nonlinear approach results in

The controller of MGX Industries is trying to estimate the upcoming quarter's cell phone costs for the company. The phone cost has been determined to be a mixed cost, of which $100 is the monthly base fee, and the total bill for the last quarter for employee cell phone usage was $780. Assume that 2 additional employees were given company cell phones to use for the upcoming quarter which should increase usage-related charges to increase by 20%. Using an account analysis approach, what do you expect the total cost to be for the company cell phones for the upcoming quarter?