Question 1

Select the appropriate cost behavior for each of the costs listed below.
-rental cost of warehouse

Accepted Answer

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

Question 2

Grindgood Company operates a chain of cozy coffee shops. The company's chief executive officer is interested in accumulating some information on the overhead costs incurred by the company. You have been asked to analyze the following six months worth of data.
$\begin{array}{|l|c|c|} 
\hline& \text { Overhead } & \text { No. of } \
\hline \text { Month } & \text { cost } & \text { Labor Hours } \
\hline \text { April } & \$ 60,160 & 867\\hline \text { May } & 56,500 & 624 \
\hline \text { June } & 58,900 & 689 \
\hline \text { July } & 63,500 & 974 \
\hline \text { August } & 59,325 & 730 \
\hline \text { September } & 62,400 & 901 \
\hline
\end{array}$ Required:

Accepted Answer

The answer of Grindgood Company operates a chain of cozy...

Question 3

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 2,300 machine hours (rounded to the nearest dollar) is

Accepted Answer

A)  $30,940. 
B)  $37,116. 
C)  $25,945. 
D)  $10,631. 
A)  $30,940. 
B)  $37,116. 
C)  $25,945. 
D)  $10,631.

Question 4

Coefficients shown by a regression program are:
   Required:

Accepted Answer

The answer of Coefficients shown by a regression program are:
...

Question 5

Figure 3-6.Taran Company incurred the following costs for the months of January and February.  
-Refer to Figure 3-6. From the information above we can assume that

Accepted Answer

A)  insurance and depreciation are fixed costs. 
B)  output decreased from January to February. 
C)  output stayed the same from January to February. 
D)  insurance is a mixed cost. 
A)  insurance and depreciation are fixed costs. 
B)  output decreased from January to February. 
C)  output stayed the same from January to February. 
D)  insurance is a mixed cost.

Question 6

Machine hours and electricity costs for Wells Industries for 2011 were as follows:
$\begin{array}{|l|c|c|}
\hline & \text { Machine } & \text { Electricity } \
\hline \text { Month } & \text { Hours } & \text { Costs } \
\hline \text { January } & 2,000 & \$ 9,200 \\hline \text { February } & 2,320 & 10,500 \
\hline \text { March } & 1,520 & 6,750 \
\hline \text { April } & 2,480 & 11,500 \
\hline \text { May } & 3,040 & 14,125 \
\hline \text { June } & 2,640 & 11,000 \\hline \text { July } & 3,280 & 12,375 \
\hline \text { August } & 2,800 & 11,375 \
\hline \text { September } & 1,600 & 7,750 \
\hline \text { October } & 2,960 & 13,000 \
\hline \text { November } & 3,760 & 15,500 \
\hline \text { December } & 3,360 & 13,875\
\hline
\end{array}$ Required:

Accepted Answer

The answer of Machine hours and electricity costs for Wells...

Question 7

Per-unit fixed costs

Accepted Answer

A)  can be misleading and lead to poor decisions. 
B)  stay the same as output changes. 
C)  decrease as output decreases. 
D)  increase as output increases. 
A)  can be misleading and lead to poor decisions. 
B)  stay the same as output changes. 
C)  decrease as output decreases. 
D)  increase as output increases.

Question 8

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 value of the intercept (rounded to the nearest penny) is

Accepted Answer

A)  $.99. 
B)  $195.35. 
C)  $10,630.80. 
D)  $190,267.00. 
A)  $.99. 
B)  $195.35. 
C)  $10,630.80. 
D)  $190,267.00.

Question 9

Figure 3-7.Margola Company produces hand-held calculators. The company controller wanted to calculate the fixed and variable costs associated with the maintenance cost incurred by the factory. Data for the past four months were collected.   Coefficients shown by a regression program are:
  
-Refer to Figure 3-7. Using the results of regression, the cost formula for maintenance cost was

Accepted Answer

A)  $1,150 * machine hours 
B)  ($4,686 - $3,956)/(386 - 310) 
C)  $9.06 * machine hours 
D)  $1,150 + ($9.06 * machine hours) 
A)  $1,150 * machine hours 
B)  ($4,686 - $3,956)/(386 - 310) 
C)  $9.06 * machine hours 
D)  $1,150 + ($9.06 * machine hours)

Question 10

Figure 3-10.The following cost formula was developed using the monthly data for an accounting firm.Total cost = $87,100 + ($210 * number of tax returns)
-Refer to Figure 3-10. The term $210

Accepted Answer

A)  is the independent variable. 
B)  is the dependant variable. 
C)  is the intercept. 
D)  is the variable rate. 
A)  is the independent variable. 
B)  is the dependant variable. 
C)  is the intercept. 
D)  is the variable rate.

Question 11

Managerial judgment is critically important in determining cost behavior.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)  mixed range. 
B)  relevant range. 
C)  linear range. 
D)  dependent range. 
A)  mixed range. 
B)  relevant range. 
C)  linear range. 
D)  dependent range.

Question 13

Which of the following is not an example of a discretionary fixed cost?

Accepted Answer

A)  research and development 
B)  training costs 
C)  advertising costs 
D)  direct materials 
A)  research and development 
B)  training costs 
C)  advertising costs 
D)  direct materials

Question 14

Discretionary fixed costs

Accepted Answer

A)  cannot be easily changed. 
B)  often involve a long-term contract. 
C)  can be changed relatively easy at management discretion. 
D)  increase as output increases. 
A)  cannot be easily changed. 
B)  often involve a long-term contract. 
C)  can be changed relatively easy at management discretion. 
D)  increase as output increases.

Question 15

Figure 3-9.The following cost formula was developed using monthly data for a retail clothing store.Total cost = $75,620 + ($242 * number of customers)
-Refer to Figure 3-9. The term "number of customers"

Accepted Answer

A)  is the independent variable. 
B)  is the dependant variable. 
C)  is the intercept. 
D)  is the variable rate. 
A)  is the independent variable. 
B)  is the dependant variable. 
C)  is the intercept. 
D)  is the variable rate.

Question 16

Calculation of the cost line using the high-low method tests the lowest cost period to see if it is an outlier.

Accepted Answer

A) True 
 B)False

Question 17

Select the appropriate item for each of the definitions listed below.
-may reveal the presence of outliers

Accepted Answer

A) high-low method 
B) scatter-graph method 
C) method of least squares 
A) high-low method 
B) scatter-graph method 
C) method of least squares

Question 18

Computing unit fixed costs may result in misleading information.

Accepted Answer

A) True 
 B)False

Question 19

A cost that changes in total as output changes is a variable cost.

Accepted Answer

A) True 
 B)False

Question 20

Why is managerial judgment essential to predicting cost behavior?

Accepted Answer

Managerial judgment is important because

Select the appropriate cost behavior for each of the costs listed below. -rental cost of warehouse

Coefficients shown by a regression program are: Required:

Figure 3-6.Taran Company incurred the following costs for the months of January and February. -Refer to Figure 3-6. From the information above we can assume that

Per-unit fixed costs

Figure 3-10.The following cost formula was developed using the monthly data for an accounting firm.Total cost = $87,100 + ($210 * number of tax returns) -Refer to Figure 3-10. The term $210

Managerial judgment is critically important in determining cost behavior.

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

Which of the following is not an example of a discretionary fixed cost?

Discretionary fixed costs

Figure 3-9.The following cost formula was developed using monthly data for a retail clothing store.Total cost = $75,620 + ($242 * number of customers) -Refer to Figure 3-9. The term "number of customers"

Calculation of the cost line using the high-low method tests the lowest cost period to see if it is an outlier.

Select the appropriate item for each of the definitions listed below. -may reveal the presence of outliers

Computing unit fixed costs may result in misleading information.

A cost that changes in total as output changes is a variable cost.

Why is managerial judgment essential to predicting cost behavior?

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

Select the appropriate cost behavior for each of the costs listed below. -rental cost of warehouse

Coefficients shown by a regression program are: Required:

Figure 3-6.Taran Company incurred the following costs for the months of January and February. -Refer to Figure 3-6. From the information above we can assume that

Per-unit fixed costs

Figure 3-10.The following cost formula was developed using the monthly data for an accounting firm.Total cost = $87,100 + ($210 * number of tax returns) -Refer to Figure 3-10. The term $210

Managerial judgment is critically important in determining cost behavior.

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

Which of the following is not an example of a discretionary fixed cost?

Discretionary fixed costs

Figure 3-9.The following cost formula was developed using monthly data for a retail clothing store.Total cost = $75,620 + ($242 * number of customers) -Refer to Figure 3-9. The term "number of customers"

Calculation of the cost line using the high-low method tests the lowest cost period to see if it is an outlier.

Select the appropriate item for each of the definitions listed below. -may reveal the presence of outliers

Computing unit fixed costs may result in misleading information.

A cost that changes in total as output changes is a variable cost.

Why is managerial judgment essential to predicting cost behavior?

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