Question 1

At 400 units, what is the total variable costs using the mixed cost graph shown below:

Accepted Answer

A)  $50 
B)  $100 
C)  $700 
D)  $1,000 
A)  $50 
B)  $100 
C)  $700 
D)  $1,000

Question 2

Sanchez Manufacturing Company collected the following production data for the past year:   If the high-low method is used, what is cost equation for the year?

Accepted Answer

Total cost = $33/unit + $13,200 , 
 (Hig

Question 3

A mixed cost

Accepted Answer

A) can be fixed one period and then, change to variable in a subsequent period. 
B) changes inversely with changes in volume. 
C) includes both a variable cost and a fixed cost component. 
D) is omitted from CVP analysis since it does not fit either a fixed or variable category. 
A) can be fixed one period and then, change to variable in a subsequent period. 
B) changes inversely with changes in volume. 
C) includes both a variable cost and a fixed cost component. 
D) is omitted from CVP analysis since it does not fit either a fixed or variable category.

Question 4

If the (X,Y) relationship is purely variable,

Accepted Answer

A)  regression analysis must be used. 
B)  the equation of a line becomes Y = m(X). 
C)  the equation of a line that must be used is Y = m(X) + b 
D)  account analysis must be used. 
A)  regression analysis must be used. 
B)  the equation of a line becomes Y = m(X). 
C)  the equation of a line that must be used is Y = m(X) + b 
D)  account analysis must be used.

Question 5

When evaluating the output of a multiple regression model, one needs to check

Accepted Answer

A)  the validity of the entire model using the criteria of economic plausibility, goodness of fit, and significance of slope. 
B)  the validity of the entire model using the criteria of economic plausibility only since the goodness of fit and significance of slope validity have been addressed in the multiple regression runs of data. 
C)  the validity of the last data set run using the criteria of economic plausibility, goodness of fit, and significance of slope. 
D)  the validity of the model using the first and last set of data run using the criteria of economic plausibility, goodness of fit, and significance of slope. 
A)  the validity of the entire model using the criteria of economic plausibility, goodness of fit, and significance of slope. 
B)  the validity of the entire model using the criteria of economic plausibility only since the goodness of fit and significance of slope validity have been addressed in the multiple regression runs of data. 
C)  the validity of the last data set run using the criteria of economic plausibility, goodness of fit, and significance of slope. 
D)  the validity of the model using the first and last set of data run using the criteria of economic plausibility, goodness of fit, and significance of slope.

Question 6

A leak in the roof ruined part of the data needed to complete the high-low method calculation. The high point related to 50 units indicates a total cost of $1,840. Total fixed costs are estimated at $1,200. The plans are to produce 60 units in the current month. How much is the variable cost per unit?

Accepted Answer

A)  $11.20 
B)  $12.80 
C)  $20.00 
D)  $64.00 
A)  $11.20 
B)  $12.80 
C)  $20.00 
D)  $64.00

Question 7

Which of the following is not correct concerning the account analysis method?

Accepted Answer

A)  It uses estimated costs to predict future costs. 
B)  It requires insight of the nature of the costs. 
C)   It requires that mixed costs be separated into their variable and fixed components. 
D)  It is scalable. 
A)  It uses estimated costs to predict future costs. 
B)  It requires insight of the nature of the costs. 
C)   It requires that mixed costs be separated into their variable and fixed components. 
D)  It is scalable.

Question 8

When evaluating a regression analysis output, what should one check for?

Accepted Answer

When evaluating a regression o

Question 9

What are the two major reasons to use the account analysis method, the high-low method, and the regression method?

Accepted Answer

1) To separate mixed costs int

Question 10

You have just started your new job as a staff accountant for a local business. The President and owner of the company has asked you to help him to create a budget for utility costs for next year. He is specifically interested in estimating the cost for the electric for the upcoming fiscal year. He has provided you with the utility bills for the last 6 months, along with the login for the online account with the utility company to access additional information. Required: The company President is asking you to budget for the total annual electric costs using the account analysis method using the following information with the expectation that the total kWH usage for the next fiscal year will be based on the average usage over the last six months for a monthly usage to be annualized, with an increase in the kWH rate of 10% (the monthly base fee will not change for next year):

Accepted Answer

$4,681.72 , The monthly kWH rate is comp

Question 11

Which of the following methods would be the most comprehensive and reliable predictor of future costs for linear cost functions?

Accepted Answer

A)  Account analysis method. 
B)  High-low method. 
C)  Regression method. 
D)  Learning curve method. 
A)  Account analysis method. 
B)  High-low method. 
C)  Regression method. 
D)  Learning curve method.

Question 12

Carl's Canine Cuts has just recently opened for business offering grooming services for all breeds of dogs. Carl has just finished his first day of service and has noted a remarkable improvement in the amount of time that it takes him to complete a grooming service for each dog. Currently, he managed to groom the 4th dog by the end of the day in 2 hours (120 minutes) time. If Carl has an 80% learning curve, how much time should it take him to groom the 8th dog? The 16th dog?

Accepted Answer

8^th Dog Grooming Time = 96 minutes: 16^th Dog

Question 13

The relevant range is

Accepted Answer

A)  a band of activity with a specific relationship between activity levels and the cost of being measured. 
B)  the slope of the cost line based on a cost equation. 
C)  the y-intercept of a cost line based on a cost equation. 
D)  the range in which a company earns a profit. 
A)  a band of activity with a specific relationship between activity levels and the cost of being measured. 
B)  the slope of the cost line based on a cost equation. 
C)  the y-intercept of a cost line based on a cost equation. 
D)  the range in which a company earns a profit.

Question 14

Given the mixed cost graph below, what is the amount of the slope?

Accepted Answer

A) $1.00 
B)  $0.50 
C)  $2.00 
D)  $.040 
A) $1.00 
B)  $0.50 
C)  $2.00 
D)  $.040

Question 15

In graphing the "line of best fit" in the regression method

Accepted Answer

A)  one would expect to not see any residuals scattered around the cost line. 
B)  none of the data points have to touch the cost line. 
C)  some of the data points must touch the cost line. 
D)  a straight line will not exist within the relevant range. 
A)  one would expect to not see any residuals scattered around the cost line. 
B)  none of the data points have to touch the cost line. 
C)  some of the data points must touch the cost line. 
D)  a straight line will not exist within the relevant range.

Question 16

If there is a learning curve in effect, what would be expected as more units of output are produced with regards to production time and costs?

Accepted Answer

If there is a learning curve in effect,

Question 17

What are the metrics that can be used to evaluate the validity of a regression model?

Accepted Answer

The metrics that can be used to evaluate

Question 18

What is the relevant range and how is it important in predicting future costs?

Accepted Answer

The relevant ranged is a band of activit

Question 19

DMX anticipates producing 500 license plates during his stay in a Miami jail during July. The budgeted costs for July are $5,600 with $4,200 being related to variable costs. How much will the total cost be if DMX produces 600 license plates?

Accepted Answer

A)  $3,500 
B)  $4,200 
C)  $5,600 
D)  $6,440 
A)  $3,500 
B)  $4,200 
C)  $5,600 
D)  $6,440

Question 20

Ahmed Company had a high level of activity in June of 7,000 machine hours and related electrical costs of $20,000. In February had a month of low activity of 2,000 machine hours with electrical costs of $10,000. Using the high-low method, what are the variable cost per unit and the estimated fixed cost element of electrical costs?

Accepted Answer

Fixed cost element = $6,000, (High Activ

At 400 units, what is the total variable costs using the mixed cost graph shown below:

Sanchez Manufacturing Company collected the following production data for the past year: If the high-low method is used, what is cost equation for the year?

A mixed cost

If the (X,Y) relationship is purely variable,

When evaluating the output of a multiple regression model, one needs to check

Which of the following is not correct concerning the account analysis method?

When evaluating a regression analysis output, what should one check for?

What are the two major reasons to use the account analysis method, the high-low method, and the regression method?

Which of the following methods would be the most comprehensive and reliable predictor of future costs for linear cost functions?

The relevant range is

Given the mixed cost graph below, what is the amount of the slope?

In graphing the "line of best fit" in the regression method

If there is a learning curve in effect, what would be expected as more units of output are produced with regards to production time and costs?

What are the metrics that can be used to evaluate the validity of a regression model?

What is the relevant range and how is it important in predicting future costs?

DMX anticipates producing 500 license plates during his stay in a Miami jail during July. The budgeted costs for July are $5,600 with $4,200 being related to variable costs. How much will the total cost be if DMX produces 600 license plates?

Cost Accounting Has Purpose

Refresher on Cost Terms Road Map

Cost-Volume-Profit Analysis

Cost Accounting Has Purpose

Mastering the Master Budget

Capital Budgeting Choices and Decisions

Job Costing

Activity- Based Costing

Variance Analysis and Standard Costing

Process Costing

Absorption Versus Variable Costing

Data Analytics

Support Department Costing

Joint Costs and Decision-Making

The Art and Science of Pricing to Optimize Revenue

Management Control Systems and Transfer Pricing

Business Strategy, Performance Measurement, and the Balanced Scorecard

Filters

Exam 3: Cost Behavior and Estimation

At 400 units, what is the total variable costs using the mixed cost graph shown below:

Sanchez Manufacturing Company collected the following production data for the past year: If the high-low method is used, what is cost equation for the year?

A mixed cost

If the (X,Y) relationship is purely variable,

When evaluating the output of a multiple regression model, one needs to check

Which of the following is not correct concerning the account analysis method?

When evaluating a regression analysis output, what should one check for?

What are the two major reasons to use the account analysis method, the high-low method, and the regression method?

Which of the following methods would be the most comprehensive and reliable predictor of future costs for linear cost functions?

The relevant range is

Given the mixed cost graph below, what is the amount of the slope?

In graphing the "line of best fit" in the regression method

If there is a learning curve in effect, what would be expected as more units of output are produced with regards to production time and costs?

What are the metrics that can be used to evaluate the validity of a regression model?

What is the relevant range and how is it important in predicting future costs?

DMX anticipates producing 500 license plates during his stay in a Miami jail during July. The budgeted costs for July are $5,600 with $4,200 being related to variable costs. How much will the total cost be if DMX produces 600 license plates?

Cost Accounting Has Purpose

Refresher on Cost Terms Road Map

Cost-Volume-Profit Analysis

Cost Accounting Has Purpose

Mastering the Master Budget

Capital Budgeting Choices and Decisions

Job Costing

Activity- Based Costing

Variance Analysis and Standard Costing

Process Costing

Absorption Versus Variable Costing

Data Analytics

Support Department Costing

Joint Costs and Decision-Making

The Art and Science of Pricing to Optimize Revenue

Management Control Systems and Transfer Pricing

Business Strategy, Performance Measurement, and the Balanced Scorecard

Filters