Question 1

What is goodness-of-fit?

Accepted Answer

Goodness-of-fit indi

Question 2

Which of the following estimation method is used by managers to estimate cost functions when they classify various cost accounts as variable,fixed,or mixed in regard to the identified level of activity?

Accepted Answer

A) Industrial Engineering Method. 
B) Conference Method. 
C) Account Analysis Method. 
D) Quantitative Analysis Method. 
E) Work-Measurement Method. 
A) Industrial Engineering Method. 
B) Conference Method. 
C) Account Analysis Method. 
D) Quantitative Analysis Method. 
E) Work-Measurement Method.

Question 3

The vertical difference that is a measurement of the distance between actual cost and estimate cost for each observation of a cost driver is called the ________.

Accepted Answer

A) cost function 
B) residual term 
C) relevant range 
D) high-low method 
E) simple regression 
A) cost function 
B) residual term 
C) relevant range 
D) high-low method 
E) simple regression

Question 4

The cost function y = $3,000 + $2X:

Accepted Answer

A) represents a fixed cost. 
B) represents a mixed cost. 
C) represents a variable cost. 
D) has a constant of $3002X. 
E) has a constant of intercept 2X. 
A) represents a fixed cost. 
B) represents a mixed cost. 
C) represents a variable cost. 
D) has a constant of $3002X. 
E) has a constant of intercept 2X.

Question 5

The quantitative analysis method is the most rigorous approach to estimate costs.

Accepted Answer

A) True 
 B)False

Question 6

The methods that use subjective assessments to choose a cost driver and to estimate the fixed and variable components of the cost function are:

Accepted Answer

A) conference and quantitative. 
B) conference and regressions. 
C) conference and simple regression. 
D) conference and account analysis. 
E) conference and industrial engineering. 
A) conference and quantitative. 
B) conference and regressions. 
C) conference and simple regression. 
D) conference and account analysis. 
E) conference and industrial engineering.

Question 7

Why do managers prefer to collect data related to costs and cost drivers over longer time periods?

Accepted Answer

Managers prefer to collect dat

Question 8

A/an ________ is the component of total cost that does not vary with changes in levels of activity.

Accepted Answer

A) constant 
B) intercept 
C) mixed cost 
D) variable cost 
E) cost estimation 
A) constant 
B) intercept 
C) mixed cost 
D) variable cost 
E) cost estimation

Question 9

Step-cost functions are examples of nonlinear cost functions.

Accepted Answer

A) True 
 B)False

Question 10

Better cost predictions do not help managers make informed planning and control decisions,such as preparing next year's customer-service budget.

Accepted Answer

A) True 
 B)False

Question 11

In which step of the decision process are managers fairly confident about the direct material and direct manufacturing labor costs associated with a product or service?

Accepted Answer

A) Step 1: Identify the Problem and Uncertainties. 
B) Step 2: Obtain Information. 
C) Step 3: Make Predictions about the Future. 
D) Step 4: Make Decisions by Choosing among the Alternatives. 
E) Step 5: Implement the Decision,Evaluate Performance,and Learn. 
A) Step 1: Identify the Problem and Uncertainties. 
B) Step 2: Obtain Information. 
C) Step 3: Make Predictions about the Future. 
D) Step 4: Make Decisions by Choosing among the Alternatives. 
E) Step 5: Implement the Decision,Evaluate Performance,and Learn.

Question 12

Which of the following is the analysis that estimates the relationship between the dependent variable and one independent variable?

Accepted Answer

A) Cost function. 
B) Relevant range. 
C) High-low method. 
D) Simple regression. 
E) Multiple regression. 
A) Cost function. 
B) Relevant range. 
C) High-low method. 
D) Simple regression. 
E) Multiple regression.

Question 13

The ________ uses only the highest and lowest observed values of the cost driver within the relevant range and their respective costs to estimate the slope coefficient and the constant of the cost function.

Accepted Answer

A) cost function 
B) relevant range 
C) high-low method 
D) dependent variable 
E) independent variable 
A) cost function 
B) relevant range 
C) high-low method 
D) dependent variable 
E) independent variable

Question 14

The Parker Cellular Company is charged a total cost that changes in proportion to the number of minutes used.The number of minutes used is the only factor that causes a change in total cost.How would the managerial accountant classify total costs of phone charges?

Accepted Answer

A) Fixed. 
B) Mixed. 
C) Variable. 
D) Fixed cost in the relevant range. 
E) Mixed cost in the relevant range. 
A) Fixed. 
B) Mixed. 
C) Variable. 
D) Fixed cost in the relevant range. 
E) Mixed cost in the relevant range.

Question 15

A flat,or slightly sloped,regression line indicates:

Accepted Answer

A) a strong relationship between the cost driver and costs. 
B) a weak relationship between the cost driver and costs. 
C) an economically plausible relationship exists. 
D) management should increase costs. 
E) there is no relationship between the cost driver and costs. 
A) a strong relationship between the cost driver and costs. 
B) a weak relationship between the cost driver and costs. 
C) an economically plausible relationship exists. 
D) management should increase costs. 
E) there is no relationship between the cost driver and costs.

Question 16

The Photography Shoppe uses the high-low method and reported the following information to estimate the cost function.The managerial accountant provided the following information in 2012:
 
Required:
Compute the slope coefficient per machine-hour.

Accepted Answer

A) $10 
B) $20 
C) $30 
D) $40 
E) $50 
A) $10 
B) $20 
C) $30 
D) $40 
E) $50

Question 17

Why do managers identify cost drivers on a long-time horizon?

Accepted Answer

Typically,costs are fixed in short time

What is goodness-of-fit?

Which of the following estimation method is used by managers to estimate cost functions when they classify various cost accounts as variable,fixed,or mixed in regard to the identified level of activity?

The vertical difference that is a measurement of the distance between actual cost and estimate cost for each observation of a cost driver is called the ________.

The cost function y = $3,000 + $2X:

The quantitative analysis method is the most rigorous approach to estimate costs.

The methods that use subjective assessments to choose a cost driver and to estimate the fixed and variable components of the cost function are:

Why do managers prefer to collect data related to costs and cost drivers over longer time periods?

A/an ________ is the component of total cost that does not vary with changes in levels of activity.

Step-cost functions are examples of nonlinear cost functions.

Better cost predictions do not help managers make informed planning and control decisions,such as preparing next year's customer-service budget.

In which step of the decision process are managers fairly confident about the direct material and direct manufacturing labor costs associated with a product or service?

Which of the following is the analysis that estimates the relationship between the dependent variable and one independent variable?

The ________ uses only the highest and lowest observed values of the cost driver within the relevant range and their respective costs to estimate the slope coefficient and the constant of the cost function.

The Parker Cellular Company is charged a total cost that changes in proportion to the number of minutes used.The number of minutes used is the only factor that causes a change in total cost.How would the managerial accountant classify total costs of phone charges?

A flat,or slightly sloped,regression line indicates:

The Photography Shoppe uses the high-low method and reported the following information to estimate the cost function.The managerial accountant provided the following information in 2012: Required: Compute the slope coefficient per machine-hour.

Why do managers identify cost drivers on a long-time horizon?

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters

Exam 8: Determining How Costs Behave

What is goodness-of-fit?

Which of the following estimation method is used by managers to estimate cost functions when they classify various cost accounts as variable,fixed,or mixed in regard to the identified level of activity?

The vertical difference that is a measurement of the distance between actual cost and estimate cost for each observation of a cost driver is called the ________.

The cost function y = $3,000 + $2X:

The quantitative analysis method is the most rigorous approach to estimate costs.

The methods that use subjective assessments to choose a cost driver and to estimate the fixed and variable components of the cost function are:

Why do managers prefer to collect data related to costs and cost drivers over longer time periods?

A/an ________ is the component of total cost that does not vary with changes in levels of activity.

Step-cost functions are examples of nonlinear cost functions.

Better cost predictions do not help managers make informed planning and control decisions,such as preparing next year's customer-service budget.

In which step of the decision process are managers fairly confident about the direct material and direct manufacturing labor costs associated with a product or service?

Which of the following is the analysis that estimates the relationship between the dependent variable and one independent variable?

The ________ uses only the highest and lowest observed values of the cost driver within the relevant range and their respective costs to estimate the slope coefficient and the constant of the cost function.

The Parker Cellular Company is charged a total cost that changes in proportion to the number of minutes used.The number of minutes used is the only factor that causes a change in total cost.How would the managerial accountant classify total costs of phone charges?

A flat,or slightly sloped,regression line indicates:

The Photography Shoppe uses the high-low method and reported the following information to estimate the cost function.The managerial accountant provided the following information in 2012: Required: Compute the slope coefficient per machine-hour.

Why do managers identify cost drivers on a long-time horizon?

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters