Question 1

Which of the following would probably be a committed fixed cost for an accounting firm?

Accepted Answer

A)  lease of computers 
B)  rent on the office building 
C)  property taxes on building 
D)  All of these are correct. 
A)  lease of computers 
B)  rent on the office building 
C)  property taxes on building 
D)  All of these are correct.

Question 2

The cost of advertising is usually a discretionary fixed cost.

Accepted Answer

A) True 
 B)False

Question 3

Using a regression program, the term 'X Variable 1' refers to the dependent variable.

Accepted Answer

A) True 
 B)False

Question 4

Select the appropriate cost behavior for each of the costs listed below.
-factory supplies

Accepted Answer

A) variable 
B) fixed 
A) variable 
B) fixed

Question 5

If output increases

Accepted Answer

A)  per-unit fixed cost will increase. 
B)  total variable costs will increase. 
C)  per-unit variable costs will increase. 
D)  per-unit variable costs will decrease. 
A)  per-unit fixed cost will increase. 
B)  total variable costs will increase. 
C)  per-unit variable costs will increase. 
D)  per-unit variable costs will decrease.

Question 6

Figure 3-13.The following 6 months of data were collected on electricity cost and the number of machine hours in a factory.  
-Refer to Figure 3-13. An independent variable value used in calculating the cost line using the high-low method is:

Accepted Answer

A)  $27,950 
B)  5,430 
C)  $25,160 
D)  4,000 
A)  $27,950 
B)  5,430 
C)  $25,160 
D)  4,000

Question 7

Select the appropriate item for each of the definitions listed below.
-it measures output and explains changes in cost

Accepted Answer

A) dependant variable 
B) independent variable 
C) intercept 
D) slope 
A) dependant variable 
B) independent variable 
C) intercept 
D) slope

Question 8

Figure 3-4.Botana Company constructed the following formula for monthly utility cost.Total utility cost = $1,200 + ($8.10 * labor hours)
Assume that 775 labor hours are budgeted for the month of April.
-Refer to Figure 3-4. If Botana Company incurs 9,600 labor hours for the year, what would be the estimate of total utility cost?

Accepted Answer

A)  $76,560 
B)  $78,960 
C)  $92,160 
D)  none of these are correct 
A)  $76,560 
B)  $78,960 
C)  $92,160 
D)  none of these are correct

Question 9

Figure 3-5.Maxwell Company makes treadmills. The company controller wants to calculate the fixed and variable costs associated with the janitorial costs incurred in the factory. Data for the past four months were collected.  
-Refer to Figure 3-5. What would Maxwell Company's estimate of total janitorial cost be at a level of 600 machine hours?

Accepted Answer

A)  $11,280 
B)  $7,500 
C)  $4,080 
D)  $6,120 
A)  $11,280 
B)  $7,500 
C)  $4,080 
D)  $6,120

Question 10

Discretionary fixed costs often involve a long-term contract.

Accepted Answer

A) True 
 B)False

Question 11

Managerial judgment

Accepted Answer

A)  is the most accurate way to determine cost behavior. 
B)  is the least used method in practice. 
C)  is critically important in determining cost behavior. 
D)  none of these are correct 
A)  is the most accurate way to determine cost behavior. 
B)  is the least used method in practice. 
C)  is critically important in determining cost behavior. 
D)  none of these are correct

Question 12

Explain the difference between a committed and a discretionary fixed cost.

Accepted Answer

A committed fixed cost is normally uncha

Question 13

Variable costs within the relevant range

Accepted Answer

A)  stay constant on a per unit basis as output changes. 
B)  increase in total as output increases. 
C)  decrease in total as output decreases. 
D)  All of these are correct. 
A)  stay constant on a per unit basis as output changes. 
B)  increase in total as output increases. 
C)  decrease in total as output decreases. 
D)  All of these are correct.

Question 14

The ________________ is the range of output over which the assumed cost relationship is valid for the normal operations of a firm.

Accepted Answer

The answer of The ________________ is the range of output...

Question 15

The cost accountant for Bolagio Company used an Excel spreadsheet program to run ordinary least squares on a set of cost data for its utility cost. Bolagio's cost driver for utility cost is machine hours. The following results were produced.
 Intercept$\quad$$\quad$2,490
X Variable$\quad$$\quad$489 Required:

Accepted Answer

The answer of The cost accountant for Bolagio Company used...

Question 16

Figure 3-14.Blacken Company manufactures motorcycles. The company's management accountant wants to calculate the fixed and variable costs associated with utility cost incurred by the factory. Data for the past five months were collected.  
-Refer to Figure 3-14. Using a regression program, the forecasted utility cost at 2,550 machine hours (rounded to the nearest dollar) is

Accepted Answer

A)  $28,288. 
B)  $37,116. 
C)  $33,147. 
D)  $10,631. 
A)  $28,288. 
B)  $37,116. 
C)  $33,147. 
D)  $10,631.

Question 17

Figure 3-11.The following four months of data were collected on utility cost and the number of labor hours in a factory.  
-Refer to Figure 3-11. Using the high-low method, compute the fixed cost of electricity.

Accepted Answer

A)  $13,740 
B)  $10,860 
C)  $6,400 
D)  None of these are correct. 
A)  $13,740 
B)  $10,860 
C)  $6,400 
D)  None of these are correct.

Question 18

NOT: 2 min.Figure 3-8.Martin Company makes cell phones. The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory. Data for the past four months were collected.   Coefficients shown by a regression program are:
  
-Refer to Figure 3-8. Using the results of regression, calculate the variable rate of the electricity cost.

Accepted Answer

A)  $9.67 per machine hour 
B)  $9.48 per machine hour 
C)  $2,255 per machine hour 
D)  none of these are correct 
A)  $9.67 per machine hour 
B)  $9.48 per machine hour 
C)  $2,255 per machine hour 
D)  none of these are correct

Question 19

Select the appropriate type of cost for each of the definitions below.
-will increase in total in direct proportion to an increase in the cost driver

Accepted Answer

A) variable 
B) fixed 
C) mixed 
D) step 
A) variable 
B) fixed 
C) mixed 
D) step

Question 20

Figure 3-2.  
-Refer to Figure 3-2. The cost behavior of the materials cost is

Accepted Answer

A)  fixed 
B)  variable 
C)  committed 
D)  discretionary 
A)  fixed 
B)  variable 
C)  committed 
D)  discretionary

Which of the following would probably be a committed fixed cost for an accounting firm?

The cost of advertising is usually a discretionary fixed cost.

Using a regression program, the term 'X Variable 1' refers to the dependent variable.

Select the appropriate cost behavior for each of the costs listed below. -factory supplies

If output increases

Figure 3-13.The following 6 months of data were collected on electricity cost and the number of machine hours in a factory. -Refer to Figure 3-13. An independent variable value used in calculating the cost line using the high-low method is:

Select the appropriate item for each of the definitions listed below. -it measures output and explains changes in cost

Discretionary fixed costs often involve a long-term contract.

Managerial judgment

Explain the difference between a committed and a discretionary fixed cost.

Variable costs within the relevant range

The ________________ is the range of output over which the assumed cost relationship is valid for the normal operations of a firm.

Figure 3-11.The following four months of data were collected on utility cost and the number of labor hours in a factory. -Refer to Figure 3-11. Using the high-low method, compute the fixed cost of electricity.

Select the appropriate type of cost for each of the definitions below. -will increase in total in direct proportion to an increase in the cost driver

Figure 3-2. -Refer to Figure 3-2. The cost behavior of the materials cost is

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 3: Cost Behavior

Which of the following would probably be a committed fixed cost for an accounting firm?

The cost of advertising is usually a discretionary fixed cost.

Using a regression program, the term 'X Variable 1' refers to the dependent variable.

Select the appropriate cost behavior for each of the costs listed below. -factory supplies

If output increases

Figure 3-13.The following 6 months of data were collected on electricity cost and the number of machine hours in a factory. -Refer to Figure 3-13. An independent variable value used in calculating the cost line using the high-low method is:

Select the appropriate item for each of the definitions listed below. -it measures output and explains changes in cost

Discretionary fixed costs often involve a long-term contract.

Managerial judgment

Explain the difference between a committed and a discretionary fixed cost.

Variable costs within the relevant range

The ________________ is the range of output over which the assumed cost relationship is valid for the normal operations of a firm.

Figure 3-11.The following four months of data were collected on utility cost and the number of labor hours in a factory. -Refer to Figure 3-11. Using the high-low method, compute the fixed cost of electricity.

Select the appropriate type of cost for each of the definitions below. -will increase in total in direct proportion to an increase in the cost driver

Figure 3-2. -Refer to Figure 3-2. The cost behavior of the materials cost is

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters