Question 1

Which of the following types of costs are the most likely to be classified as fixed?

Accepted Answer

A)  Factory utilities 
B)  Factory supplies 
C)  Direct labour 
D)  Factory insurance 
A)  Factory utilities 
B)  Factory supplies 
C)  Direct labour 
D)  Factory insurance

Question 2

The primary difference between variable and absorption costing is the treatment of:

Accepted Answer

A)  fixed selling and administrative costs. 
B)  variable selling and administrative costs. 
C)  fixed manufacturing overhead. 
D)  variable manufacturing overhead. 
A)  fixed selling and administrative costs. 
B)  variable selling and administrative costs. 
C)  fixed manufacturing overhead. 
D)  variable manufacturing overhead.

Question 3

B & B Manufacturing
B & B Manufacturing produces a single product. Last year, the company produced 10 000 units out of which 9500 were sold. There were no units in beginning inventory. The company had the following costs:
$\begin{array}{cr}
\underline{\text { Variable costs per unit: }}\
\text { Production } & \$ 6.00 \
\text { Selling and administrative } & \$ 2.00 \
\underline{\text { Fixed costs (total):} } & \
 \text { Production } & \$ 15000 \
\text { Selling and administrative } &\$ 10000 
\end{array}$ 
-What is the unit product cost using variable costing?

Accepted Answer

A)  $ 8.00 
B)  $ 6.00 
C)  $ 7.50 
D)  $10.50 
A)  $ 8.00 
B)  $ 6.00 
C)  $ 7.50 
D)  $10.50

Question 4

The after-tax benefit of a taxable cash receipt can be calculated as follows:

Accepted Answer

A)  After-tax benefit = Pretax receipt * Tax rate 
B)  After-tax benefit = Pretax receipt *(1 - Tax rate) 
C)  After-tax benefit = Pretax receipt * (1 + Tax rate) 
D)  After-tax benefit = Pretax receipt / Tax rate 
A)  After-tax benefit = Pretax receipt * Tax rate 
B)  After-tax benefit = Pretax receipt *(1 - Tax rate) 
C)  After-tax benefit = Pretax receipt * (1 + Tax rate) 
D)  After-tax benefit = Pretax receipt / Tax rate

Question 5

Which of the following statements is false regarding regression analysis?

Accepted Answer

A)  It is used to predict the fixed and variable components of a mixed cost. 
B)  It is used to predict whether or not a cost is a product or period cost. 
C)  It is usually more accurate than the high/low method. 
D)  It uses statistical methods to fit a cost line through a number of data points. 
A)  It is used to predict the fixed and variable components of a mixed cost. 
B)  It is used to predict whether or not a cost is a product or period cost. 
C)  It is usually more accurate than the high/low method. 
D)  It uses statistical methods to fit a cost line through a number of data points.

Question 6

After-tax net income can be calculated as follows:

Accepted Answer

A)  After-tax income = Pretax income * Tax rate 
B)  After-tax income = Pretax income / (1 - Tax rate) 
C)  After-tax income = Pretax income * (1 + Tax rate) 
D)  After-tax income = Pretax income * (1 - Tax rate) 
A)  After-tax income = Pretax income * Tax rate 
B)  After-tax income = Pretax income / (1 - Tax rate) 
C)  After-tax income = Pretax income * (1 + Tax rate) 
D)  After-tax income = Pretax income * (1 - Tax rate)

Question 7

You run a regression analysis and receive the following results:
SUMMARY OUTPUT
$\begin{array}{l}
\begin{array} { l r } 
\hline{ \text { Regression Statistics } } \
\hline \text { Multiple R } & 0.88000000 \
\text { R Square } & 0.78219168 \
\text { Adjusted R Square } & 0.70958891 \
\text { Standard Error } & 1165.19000 \
\text { Observations } & 5 \
\hline
\end{array}\\
\begin{array} { l c r c c r } 
\hline & d f & S S & M S & F & \text { Significance } F \
\hline \text { Regression } & 1 & 14626984.4 & 1 \mathrm { E } + 07 & 10.7736 & 0.0463451 \
\text { Residual } & 3 & 4073015.604 & 1 \mathrm { E } + 06 & & \
\text { Total } & 4 & 18700000 & & & \
\hline
\end{array}\\
\begin{array} { l r r r c } 
\hline & \text { Coefficients } & \text { Standard Error } & t \text { Stat } & P \text {-value } \
\hline \text { Intercept } & 16146.37 & 8167.49 & 1.977 & 0.14249 \
\text { X Variable 1 } & 2.380 & 0.730 & 3.282 & 0.04635 \
\hline
\end{array}
\end{array}$ 
-What would be the equation to predict total mixed costs?

Accepted Answer

A)  Y = $2602.33 + $1.09x 
B)  Y = $454.25 + $.18x 
C)  Y = $3510.83 + $1.45x 
D)  Y = $3056.58 + $1.27x 
A)  Y = $2602.33 + $1.09x 
B)  Y = $454.25 + $.18x 
C)  Y = $3510.83 + $1.45x 
D)  Y = $3056.58 + $1.27x

Question 8

A cost that has both a fixed and variable component is called a:

Accepted Answer

A)  step cost. 
B)  mixed cost. 
C)  product cost. 
D)  relevant cost. 
A)  step cost. 
B)  mixed cost. 
C)  product cost. 
D)  relevant cost.

Question 9

Label whether each of the following costs is most likely fixed (F)or variable (V). $\begin{array}{lc}
  \text {  Direct materials} &\underline{\quad\quad}\
 \text {  Factory rent} &\underline{\quad\quad}\
 \text {Sales commissions expense  } &\underline{\quad\quad}\
 \text { Direct labour } &\underline{\quad\quad}\
 \text { Depreciation on factory building } &\underline{\quad\quad}\
\end{array}$

Accepted Answer

None

Question 10

Which of the following statements is true regarding regression analysis?

Accepted Answer

A)  It is usually the most accurate technique used to determine equivalent units. 
B)  It is usually the most accurate technique used to determine net income. 
C)  It is usually the most accurate technique used to determine the total units of production. 
D)  It is usually the most accurate technique used to determine mixed cost behaviour. 
A)  It is usually the most accurate technique used to determine equivalent units. 
B)  It is usually the most accurate technique used to determine net income. 
C)  It is usually the most accurate technique used to determine the total units of production. 
D)  It is usually the most accurate technique used to determine mixed cost behaviour.

Question 11

You run a regression analysis and receive the following results:
SUMMARY OUTPUT
$\begin{array}{l}
\begin{array} { l r } 
\hline{ \text { Regression Statistics } } \
\hline \text { Multiple R } & 0.88000000 \
\text { R Square } & 0.78219168 \
\text { Adjusted R Square } & 0.70958891 \
\text { Standard Error } & 1165.19000 \
\text { Observations } & 5 \
\hline
\end{array}\\
\begin{array} { l c r c c r } 
\hline & d f & S S & M S & F & \text { Significance } F \
\hline \text { Regression } & 1 & 14626984.4 & 1 \mathrm { E } + 07 & 10.7736 & 0.0463451 \
\text { Residual } & 3 & 4073015.604 & 1 \mathrm { E } + 06 & & \
\text { Total } & 4 & 18700000 & & & \
\hline
\end{array}\\
\begin{array} { l r r r c } 
\hline & \text { Coefficients } & \text { Standard Error } & t \text { Stat } & P \text {-value } \
\hline \text { Intercept } & 16146.37 & 8167.49 & 1.977 & 0.14249 \
\text { X Variable 1 } & 2.380 & 0.730 & 3.282 & 0.04635 \
\hline
\end{array}
\end{array}$ 
-When using regression analysis to predict mixed cost behaviour,which of the following would be the independent variable?

Accepted Answer

A)  The highest level of activity 
B)  The lowest level of activity 
C)  The mixed cost at a given level of production 
D)  The volume of production that drives a particular amount of mixed cost 
A)  The highest level of activity 
B)  The lowest level of activity 
C)  The mixed cost at a given level of production 
D)  The volume of production that drives a particular amount of mixed cost

Question 12

____ are costs that do not change in total when production volume increases or decreases within the relevant range.

Accepted Answer

A)  Variable costs 
B)  Relevant costs 
C)  Fixed costs 
D)  Period costs 
A)  Variable costs 
B)  Relevant costs 
C)  Fixed costs 
D)  Period costs

Question 13

Bob’s Burgers currently produces and sells 4000 burgers per month with the following costs:
$\begin{array}{ll}
\text { Variable costs } & \$ .50 \text { per unit } \
\text { Fixed costs } & \$ 2000
\end{array}$ 
Bob has recently switched food suppliers and anticipates that variable costs will decrease by $.05 per unit. In addition, Bob has renegotiated his store lease and fixed costs will be dropping by $40 per month.
-What will be Bob's new cost equation?

Accepted Answer

A)  Total costs = $2000 + $.50x 
B)  Total costs = $2000 + $.45x 
C)  Total costs = $4000 + $.50x 
D)  Total costs = $1960 + $.45x 
A)  Total costs = $2000 + $.50x 
B)  Total costs = $2000 + $.45x 
C)  Total costs = $4000 + $.50x 
D)  Total costs = $1960 + $.45x

Question 14

For each of the following statements,fill in the blank with either the word increase,decrease,or stay the same.
a.As production increases,total fixed costs ______________.
b.As production increases,fixed costs per unit _____________.
c.As production decreases,variable costs per unit _____________.
d.As production decreases,total variable costs _______________.

Accepted Answer

a.
As production increases,total fixed c

Question 15

Lockhart Products produces a single product.During 2009 the company incurred the following costs:
$\begin{array}{lr}
  \text { Variable product costs } & \text {$ \$ 8.00 $ per unit } \
 \text { Variable period costs } & \text {$ \$ 2.00 $ per unit  } \
 \text {Total fixed product costs  } &\$21000\
 \text { Total fixed period costs } &\$10000\
\end{array}$
 
Lockhart had no units in beginning inventory.During 2009,6000 units were produced and 5000 units were sold.Which of the following statements is true when comparing net income using absorption versus variable costing?

Accepted Answer

A)  Net income will be $3500 higher using absorption costing than using variable costing. 
B)  Net income will be $3500 lower using absorption costing than using variable costing. 
C)  Net income will be $4200 higher using absorption costing than using variable costing. 
D)  Net income will be $4200 lower using absorption costing than using variable costing. 
A)  Net income will be $3500 higher using absorption costing than using variable costing. 
B)  Net income will be $3500 lower using absorption costing than using variable costing. 
C)  Net income will be $4200 higher using absorption costing than using variable costing. 
D)  Net income will be $4200 lower using absorption costing than using variable costing.

Question 16

You run a regression analysis and receive the following results:
SUMMARY OUTPUT
$\begin{array}{l}
\begin{array} { l r } 
\hline{ \text { Regression Statistics } } \
\hline \text { Multiple R } & 0.88000000 \
\text { R Square } & 0.78219168 \
\text { Adjusted R Square } & 0.70958891 \
\text { Standard Error } & 1165.19000 \
\text { Observations } & 5 \
\hline
\end{array}\\
\begin{array} { l c r c c r } 
\hline & d f & S S & M S & F & \text { Significance } F \
\hline \text { Regression } & 1 & 14626984.4 & 1 \mathrm { E } + 07 & 10.7736 & 0.0463451 \
\text { Residual } & 3 & 4073015.604 & 1 \mathrm { E } + 06 & & \
\text { Total } & 4 & 18700000 & & & \
\hline
\end{array}\\
\begin{array} { l r r r c } 
\hline & \text { Coefficients } & \text { Standard Error } & t \text { Stat } & P \text {-value } \
\hline \text { Intercept } & 16146.37 & 8167.49 & 1.977 & 0.14249 \
\text { X Variable 1 } & 2.380 & 0.730 & 3.282 & 0.04635 \
\hline
\end{array}
\end{array}$ 
-To the nearest dollar,what would be the estimated total costs if 3000 units were produced?

Accepted Answer

A)  $23 286 
B)  $16 146 
C)  $10 357 
D)  $33 643 
A)  $23 286 
B)  $16 146 
C)  $10 357 
D)  $33 643

Question 17

Cornell Products
Cornell Products has the following cost information available for 2009:
$$\begin{array} { l r } 
\text { Direct materials } & \$ 1.00 \text { per unit } \
\text { Direct labour } & \$ 2.00 \text { per unit } \
\text { Variable manufacturing overhead } & \$ 1.50 \text { per unit } \
\text { Variable selling and administrative costs } & \$ 50 \text { per unit } \
\text { Fixed manufacturing overhead } & \$ 30000 \
\text { Fixed selling and administrative costs } & \$ 25000
\end{array}$$
During 2009, Cornell produced 6000 units out of which 5400 units were sold for $20 each.
-What is net income under absorption costing?

Accepted Answer

A)  $23 000 
B)  $29 000 
C)  $26 000 
D)  $35 000 
A)  $23 000 
B)  $29 000 
C)  $26 000 
D)  $35 000

Question 18

You run a regression analysis and receive the following results:
SUMMARY OUTPUT
$\begin{array}{l}
\begin{array} { l r } 
\hline{ \text { Regression Statistics } } \
\hline \text { Multiple R } & 0.88000000 \
\text { R Square } & 0.78219168 \
\text { Adjusted R Square } & 0.70958891 \
\text { Standard Error } & 1165.19000 \
\text { Observations } & 5 \
\hline
\end{array}\\
\begin{array} { l c r c c r } 
\hline & d f & S S & M S & F & \text { Significance } F \
\hline \text { Regression } & 1 & 14626984.4 & 1 \mathrm { E } + 07 & 10.7736 & 0.0463451 \
\text { Residual } & 3 & 4073015.604 & 1 \mathrm { E } + 06 & & \
\text { Total } & 4 & 18700000 & & & \
\hline
\end{array}\\
\begin{array} { l r r r c } 
\hline & \text { Coefficients } & \text { Standard Error } & t \text { Stat } & P \text {-value } \
\hline \text { Intercept } & 16146.37 & 8167.49 & 1.977 & 0.14249 \
\text { X Variable 1 } & 2.380 & 0.730 & 3.282 & 0.04635 \
\hline
\end{array}
\end{array}$ 
-To the nearest dollar,what would be the estimated total costs if 500 units were produced?

Accepted Answer

A)  $ 544 
B)  $4236 
C)  $3692 
D)  $3147 
A)  $ 544 
B)  $4236 
C)  $3692 
D)  $3147

Question 19

As production increases,variable costs per unit ____.

Accepted Answer

A)  increase. 
B)  decrease. 
C)  stay the same. 
D)  can not be predicted. 
A)  increase. 
B)  decrease. 
C)  stay the same. 
D)  can not be predicted.

Question 20

Hellman Manufacturing has the following cost information available for 2009:
 $\begin{array}{lr}
  \text { Direct materials } &\text {$ \$ 6.00 $ per unit}\
 \text { Direct labour } &\text {$ \$ 4.00 $ per unit}\
 \text {  Variable manufacturing overhead} &\text {$ \$ 2.00 $ per unit}\
 \text { Variable selling and administrative costs } &\text {$ \$ 1.00 $ per unit}\
 \text {  Fixed manufacturing overhead} &\$80000\
 \text {Fixed selling and administrative costs  } &\$25000\
\end{array}$
 
During 2009,Merriman produced 12 500 units out of which 11 000 units were sold for $60 each.
Required:
 A. Calculate Hellman's net income assuming the company uses variable costing.
B. Calculate Hellman's net income assuming the company uses absorption costing

Accepted Answer

A. Varable

Which of the following types of costs are the most likely to be classified as fixed?

The primary difference between variable and absorption costing is the treatment of:

The after-tax benefit of a taxable cash receipt can be calculated as follows:

Which of the following statements is false regarding regression analysis?

After-tax net income can be calculated as follows:

A cost that has both a fixed and variable component is called a:

Label whether each of the following costs is most likely fixed (F)or variable (V). Direct materials Factory rent Sales commissions expense Direct labour Depreciation on factory building

Which of the following statements is true regarding regression analysis?

____ are costs that do not change in total when production volume increases or decreases within the relevant range.

As production increases,variable costs per unit ____.

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, cost Terminology and Cost Flows

Job Costing and Overhead Costing Systems

Process Costing Systems

Service and Operations Costing

Departmental Overhead Costing

Activity-Based Costing

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investmentdecisions

Fixed and Rolling Budgets for Planning and Decision Making

Management Accounting for Cost Control and Performance Evaluation Flexible Budgets and Variance Analysis

Decentralisation and Modern Performance Management Systems the Balanced Scorecard

Accounting for Sustainability Social Reporting,environmental Reporting and Management Accounting

Filters

Exam 3: Cost Behaviour

Which of the following types of costs are the most likely to be classified as fixed?

The primary difference between variable and absorption costing is the treatment of:

The after-tax benefit of a taxable cash receipt can be calculated as follows:

Which of the following statements is false regarding regression analysis?

After-tax net income can be calculated as follows:

A cost that has both a fixed and variable component is called a:

Label whether each of the following costs is most likely fixed (F)or variable (V). Direct materials Factory rent Sales commissions expense Direct labour Depreciation on factory building

Which of the following statements is true regarding regression analysis?

____ are costs that do not change in total when production volume increases or decreases within the relevant range.

As production increases,variable costs per unit ____.

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, cost Terminology and Cost Flows

Job Costing and Overhead Costing Systems

Process Costing Systems

Service and Operations Costing

Departmental Overhead Costing

Activity-Based Costing

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investmentdecisions

Fixed and Rolling Budgets for Planning and Decision Making

Management Accounting for Cost Control and Performance Evaluation Flexible Budgets and Variance Analysis

Decentralisation and Modern Performance Management Systems the Balanced Scorecard

Accounting for Sustainability Social Reporting,environmental Reporting and Management Accounting

Filters