Question 1

An R-square value of 0.00 indicates a perfect relationship between the volume of activity and the cost being analyzed.

Accepted Answer

A) True 
 B)False

Question 2

Schrute Farm Sales buys portable generators for $450 and sells them for $720.He pays a sales commission of 5% of sales revenue to his sales staff.Mr.Schrute pays $2,000 a month rent for his store,and also pays $1,700 a month to his staff in addition to the commissions.Mr.Schrute sold 200 generators in June.If Mr.Schrute prepares a contribution margin income statement for the month of June,what would be his operating income?

Accepted Answer

A) $97,200 
B) $50,500 
C) $144,000 
D) $43,100 
A) $97,200 
B) $50,500 
C) $144,000 
D) $43,100

Question 3

Regression analysis is found by using only the two data points of the highest and lowest volume.

Accepted Answer

A) True 
 B)False

Question 4

If inventory has not increased or decreased,but has stayed the same,operating income will be the same under variable costing and absorption costing.

Accepted Answer

A) True 
 B)False

Question 5

The following data pertain to costs at Summit Company:
 
The variable cost per unit is

Accepted Answer

A) $3.75. 
B) $15.00. 
C) $18.75. 
D) $11.25. 
A) $3.75. 
B) $15.00. 
C) $18.75. 
D) $11.25.

Question 6

A scatter plot will help managers identify potential outliers.

Accepted Answer

A) True 
 B)False

Question 7

If 120,000 units are produced,total costs are $343,000.Total fixed costs for Blue Peace Inc.are $175,000.The variable cost per unit is

Accepted Answer

A) $4.32/unit. 
B) $1.46/unit. 
C) $2.86/unit. 
D) $1.40/unit. 
A) $4.32/unit. 
B) $1.46/unit. 
C) $2.86/unit. 
D) $1.40/unit.

Question 8

What term represents the fixed cost component in the equation: y = vx + f?

Accepted Answer

A) y 
B) v 
C) f 
D) vx 
A) y 
B) v 
C) f 
D) vx

Question 9

The high-low method uses only two of the historical data points to estimate a cost equation.

Accepted Answer

A) True 
 B)False

Question 10

All fixed costs are listed ________ on a contribution margin income statement.

Accepted Answer

A) below the contribution margin line 
B) above the gross profit line 
C) above the contribution margin line 
D) below the gross profit line 
A) below the contribution margin line 
B) above the gross profit line 
C) above the contribution margin line 
D) below the gross profit line

Question 11

The managerial accountant at Sunny Manufacturing needs to determine how many costs are fixed costs and how many costs are variable costs in the organization.The managerial accountant reported the following information:   
Use the high-low method to determine the cost equation and use machine hours as the base for a cost driver in the analysis.

Accepted Answer

$23,900 - $19,750 = $4,150
3,4

Question 12

The high-low method is theoretically better than regression analysis because the high-low method uses more data points than regression analysis.

Accepted Answer

A) True 
 B)False

Question 13

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 when it produces 2,200 birdcages.If $5,500 of the costs are fixed,and the plant manager uses the cost equation to predict total costs,his forecast for 3,000 birdcages will be

Accepted Answer

A) $52,000. 
B) $54,000. 
C) $39,600. 
D) $14,400. 
A) $52,000. 
B) $54,000. 
C) $39,600. 
D) $14,400.

Question 14

Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises' average cost per anchor is $52.00.If $15,000 of the total costs are fixed,what is the variable cost of producing each anchor?

Accepted Answer

A) $3.00 
B) $49.00 
C) $245.00 
D) $52.00 
A) $3.00 
B) $49.00 
C) $245.00 
D) $52.00

Question 15

Managers often approximate curvilinear costs and step costs as fixed costs.

Accepted Answer

A) True 
 B)False

Question 16

Total fixed costs for Diamond Enterprises are $800,000.Total costs,including both fixed and variable,are $890,000 if 120,000 units are produced.The fixed cost per unit at 200,000 units would be

Accepted Answer

A) $4.00/unit. 
B) $7.42/unit. 
C) $4.45/unit. 
D) $0.45/unit. 
A) $4.00/unit. 
B) $7.42/unit. 
C) $4.45/unit. 
D) $0.45/unit.

Question 17

Wallace Incorporated wanted to determine the relationship between its monthly operating costs and a potential cost driver,machine hours.The output of a regression analysis showed the following information (note: only a portion of the regression analysis results is presented here):  
What is the fixed cost (round to nearest cent)?

Accepted Answer

A) $67.59 
B) $0.99 
C) $2,945.95 
D) $0.72 
A) $67.59 
B) $0.99 
C) $2,945.95 
D) $0.72

Question 18

When preparing a scatter plot,how should the data be graphed?

Accepted Answer

A) Volume data on the y-axis 
B) Cost data on the x-axis 
C) Cost data on the y-axis 
D) Volume data on the z-axis 
A) Volume data on the y-axis 
B) Cost data on the x-axis 
C) Cost data on the y-axis 
D) Volume data on the z-axis

Question 19

The "averaging method" is a method that may be used to separate mixed costs into fixed and variable components.

Accepted Answer

A) True 
 B)False

Question 20

Using account analysis,what type of cost is the monthly cost of a storage locker used for holding old records?

Accepted Answer

A) Fixed 
B) Mixed 
C) Variable 
D) Step 
A) Fixed 
B) Mixed 
C) Variable 
D) Step

An R-square value of 0.00 indicates a perfect relationship between the volume of activity and the cost being analyzed.

Regression analysis is found by using only the two data points of the highest and lowest volume.

If inventory has not increased or decreased,but has stayed the same,operating income will be the same under variable costing and absorption costing.

The following data pertain to costs at Summit Company: The variable cost per unit is

A scatter plot will help managers identify potential outliers.

If 120,000 units are produced,total costs are $343,000.Total fixed costs for Blue Peace Inc.are $175,000.The variable cost per unit is

What term represents the fixed cost component in the equation: y = vx + f?

The high-low method uses only two of the historical data points to estimate a cost equation.

All fixed costs are listed ________ on a contribution margin income statement.

The high-low method is theoretically better than regression analysis because the high-low method uses more data points than regression analysis.

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 when it produces 2,200 birdcages.If $5,500 of the costs are fixed,and the plant manager uses the cost equation to predict total costs,his forecast for 3,000 birdcages will be

Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises' average cost per anchor is $52.00.If $15,000 of the total costs are fixed,what is the variable cost of producing each anchor?

Managers often approximate curvilinear costs and step costs as fixed costs.

Total fixed costs for Diamond Enterprises are $800,000.Total costs,including both fixed and variable,are $890,000 if 120,000 units are produced.The fixed cost per unit at 200,000 units would be

When preparing a scatter plot,how should the data be graphed?

The "averaging method" is a method that may be used to separate mixed costs into fixed and variable components.

Using account analysis,what type of cost is the monthly cost of a storage locker used for holding old records?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 6: Cost Behavior

An R-square value of 0.00 indicates a perfect relationship between the volume of activity and the cost being analyzed.

Regression analysis is found by using only the two data points of the highest and lowest volume.

If inventory has not increased or decreased,but has stayed the same,operating income will be the same under variable costing and absorption costing.

The following data pertain to costs at Summit Company: The variable cost per unit is

A scatter plot will help managers identify potential outliers.

If 120,000 units are produced,total costs are $343,000.Total fixed costs for Blue Peace Inc.are $175,000.The variable cost per unit is

What term represents the fixed cost component in the equation: y = vx + f?

The high-low method uses only two of the historical data points to estimate a cost equation.

All fixed costs are listed ________ on a contribution margin income statement.

The high-low method is theoretically better than regression analysis because the high-low method uses more data points than regression analysis.

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 when it produces 2,200 birdcages.If $5,500 of the costs are fixed,and the plant manager uses the cost equation to predict total costs,his forecast for 3,000 birdcages will be

Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises' average cost per anchor is $52.00.If $15,000 of the total costs are fixed,what is the variable cost of producing each anchor?

Managers often approximate curvilinear costs and step costs as fixed costs.

Total fixed costs for Diamond Enterprises are $800,000.Total costs,including both fixed and variable,are $890,000 if 120,000 units are produced.The fixed cost per unit at 200,000 units would be

When preparing a scatter plot,how should the data be graphed?

The "averaging method" is a method that may be used to separate mixed costs into fixed and variable components.

Using account analysis,what type of cost is the monthly cost of a storage locker used for holding old records?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters