Exam 10: Determining How Costs Behave

For Heavy Manufacturing Company, labor-hours are 48,000 and wages $156,000 at the high point of the relevant range, and labor-hours are 32,000 and wages $112,000 at the low point of the relevant range. What is the estimated total labor costs at Heavy Manufacturing Company when 11,400 labor-hours are used?

For Heavy Manufacturing Company, labor-hours are 40,000 and wages $184,000 at the high point of the relevant range, and labor-hours are 24,000 and wages $120,000 at the low point of the relevant range. What is the constant?

Machine-hours is a more economically plausible cost driver of machine maintenance than number of direct manufacturing labor-hours.

Regression analysis is a statistical method that measures the average amount of change in the dependent variable associated with a unit change in one or more independent variables.

Taunton Company uses the high-low method to estimate its cost function. The information for 2017 is provided below: What is the estimated cost function for the above data?

In a cost function y = 18,000, the slope coefficient is zero.

To complete the first setup on a new machine took an employee 320 minutes. Using an 70% cumulative average-time learning curve indicates that the second setup on the new machine is expected to take ________.

A particular cost item could be variable for one cost object and fixed for another cost object.

Crimson Services, Inc., employs 8 individuals. They are all paid $16.50 per hour. How would total costs of personnel be classified?

A plot of data that results in one extreme observation most likely indicates that ________.

It is appropriate to incorporate expected learning-curve efficiencies when evaluating performance.

The standard error of the estimated coefficient indicates how much the estimated value, b, is likely to be affected by random factors.

In estimating a cost function using quantitative analysis, the dependent variable is the factor used to predict the independent variable.

A plot of cost driver data and cost data may show all but the following:

In the estimation of a cost function using quantitative analysis, the independent variable ________.

The cumulative average-time learning model with a 85% learning curve indicates that if it takes 200 minutes to manufacture the first unit of a new model, then the second unit will take only 170 minutes to manufacture.

The cost function y = 2,700 + 8X ________.

The account analysis method estimates cost functions by classifying various cost accounts as variable, fixed, or mixed with respect to the identified level of activity.

Cross-sectional data analysis includes ________.

Data collection problems can arise when extreme values of observations occur.