Question 1

The visual-fit method is highly subjective and is more reliable when the cost function of the data is linear.

Accepted Answer

A) True 
 B)False  True

Question 2

Account analysis

Accepted Answer

A)  is subjective, requiring judgment by the analyst. 
B)  is more expensive than engineering analysis. 
C)  cannot be used for mixed costs. 
D)  does not require recording relevant cost accounts and cost drivers. 
A)  is subjective, requiring judgment by the analyst. 
B)  is more expensive than engineering analysis. 
C)  cannot be used for mixed costs. 
D)  does not require recording relevant cost accounts and cost drivers. A

Question 3

The application of cost measures to expected future activity levels to forecast future costs is

Accepted Answer

A)  activity analysis. 
B)  cost prediction. 
C)  budgeting. 
D)  cost measurement. 
A)  activity analysis. 
B)  cost prediction. 
C)  budgeting. 
D)  cost measurement. B

Question 4

The fixed costs required to achieve a desired level of production or to provide a desired level of service, while maintaining product or service attributes such as quality, are referred to as

Accepted Answer

A)  committed costs. 
B)  mixed costs. 
C)  capacity costs. 
D)  engineered costs. 
A)  committed costs. 
B)  mixed costs. 
C)  capacity costs. 
D)  engineered costs.

Question 5

The coefficient of determination indicates

Accepted Answer

A)  the percentage of change in the dependent variable explained by changes in the independent variable. 
B)  the percentage of change in the dependent variable caused by changes in the independent variable. 
C)  the percentage of change in the independent variable explained by changes in the dependent variable. 
D)  the percentage of change in the independent variable caused by changes in the dependent variable. 
A)  the percentage of change in the dependent variable explained by changes in the independent variable. 
B)  the percentage of change in the dependent variable caused by changes in the independent variable. 
C)  the percentage of change in the independent variable explained by changes in the dependent variable. 
D)  the percentage of change in the independent variable caused by changes in the dependent variable.

Question 6

Measuring a cost function objectively by using statistics to fit a cost function to all the data.

Accepted Answer

The answer of Measuring a cost function objectively by using...

Question 7

The Vern Corporation has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Vern Corporation has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.
  
-The total fixed cost is

Accepted Answer

A)  $13,386. 
B)  $10,680. 
C)  $5,056. 
D)  $1,800. 
A)  $13,386. 
B)  $10,680. 
C)  $5,056. 
D)  $1,800.

Question 8

In the mixed-cost function, Y = F + VX, the V stands for

Accepted Answer

A)  total fixed cost. 
B)  total cost. 
C)  variable cost per unit of cost driver. 
D)  number of units of the cost driver. 
A)  total fixed cost. 
B)  total cost. 
C)  variable cost per unit of cost driver. 
D)  number of units of the cost driver.

Question 9

The process of completing a final product or service

Accepted Answer

A)  can have only one cost driver. 
B)  may involve a number of separate activities. 
C)  can have only one cause-and-effect relationship. 
D)  can have multiple cost drivers, but they must be of equal importance. 
A)  can have only one cost driver. 
B)  may involve a number of separate activities. 
C)  can have only one cause-and-effect relationship. 
D)  can have multiple cost drivers, but they must be of equal importance.

Question 10

A property tax is an example of a

Accepted Answer

A)  mixed cost. 
B)  committed fixed cost. 
C)  discretionary cost. 
D)  engineered cost. 
A)  mixed cost. 
B)  committed fixed cost. 
C)  discretionary cost. 
D)  engineered cost.

Question 11

Costs that change abruptly at intervals of activity because the resources and their costs come in indivisible chunks.

Accepted Answer

The answer of Costs that change abruptly at intervals of...

Question 12

Understanding and quantifying how activities of an organization affect levels of costs.

Accepted Answer

Measuring

Question 13

Linear-cost behaviour

Accepted Answer

A)  is linear over the entire range of production. 
B)  cannot be graphed as a straight line. 
C)  exists when a cost changes proportionately with changes in a cost driver. 
D)  can be used to graph a step cost. 
A)  is linear over the entire range of production. 
B)  cannot be graphed as a straight line. 
C)  exists when a cost changes proportionately with changes in a cost driver. 
D)  can be used to graph a step cost.

Question 14

________ are costs that have no obvious relationship to levels of output activity but are determined as part of the periodic planning process.

Accepted Answer

A)  Capacity costs 
B)  Committed fixed costs 
C)  Discretionary fixed costs 
D)  None of the above 
A)  Capacity costs 
B)  Committed fixed costs 
C)  Discretionary fixed costs 
D)  None of the above

Question 15

The Stewart Company used regression analysis to predict the annual cost of utilities. The results were as follows:  
-The total fixed cost is

Accepted Answer

A)  $16,650. 
B)  $15,711. 
C)  $ 6,652. 
D)  $ 3,726. 
A)  $16,650. 
B)  $15,711. 
C)  $ 6,652. 
D)  $ 3,726.

Question 16

The first step in estimating or predicting costs is

Accepted Answer

A)  planning. 
B)  control. 
C)  cost measurement. 
D)  mixing costs. 
A)  planning. 
B)  control. 
C)  cost measurement. 
D)  mixing costs.

Question 17

Activity analysis is one method of approximating cost functions.

Accepted Answer

A) True 
 B)False

Question 18

Costs that contain elements of both fixed and variable cost behaviour.

Accepted Answer

The answer of Costs that contain elements of both fixed...

Question 19

The Stewart Company used regression analysis to predict the annual cost of utilities. The results were as follows:  
-The variable cost per machine hour is

Accepted Answer

A)  $1.86. 
B)  $0.96. 
C)  $7.16. 
D)  $0.46. 
A)  $1.86. 
B)  $0.96. 
C)  $7.16. 
D)  $0.46.

Question 20

The Vern Corporation has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Vern Corporation has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.
  
-The cost function would be stated as

Accepted Answer

A)  Y = $13,386 + $0.46X. 
B)  Y = $10,680 + $0.38X. 
C)  Y = $ 5,056 + $2.16X. 
D)  Y = $ 1,800 + $2.60X. 
A)  Y = $13,386 + $0.46X. 
B)  Y = $10,680 + $0.38X. 
C)  Y = $ 5,056 + $2.16X. 
D)  Y = $ 1,800 + $2.60X.

The visual-fit method is highly subjective and is more reliable when the cost function of the data is linear.

Account analysis

The application of cost measures to expected future activity levels to forecast future costs is

The fixed costs required to achieve a desired level of production or to provide a desired level of service, while maintaining product or service attributes such as quality, are referred to as

The coefficient of determination indicates

Measuring a cost function objectively by using statistics to fit a cost function to all the data.

In the mixed-cost function, Y = F + VX, the V stands for

The process of completing a final product or service

A property tax is an example of a

Costs that change abruptly at intervals of activity because the resources and their costs come in indivisible chunks.

Understanding and quantifying how activities of an organization affect levels of costs.

Linear-cost behaviour

________ are costs that have no obvious relationship to levels of output activity but are determined as part of the periodic planning process.

The Stewart Company used regression analysis to predict the annual cost of utilities. The results were as follows: -The total fixed cost is

The first step in estimating or predicting costs is

Activity analysis is one method of approximating cost functions.

Costs that contain elements of both fixed and variable cost behaviour.

The Stewart Company used regression analysis to predict the annual cost of utilities. The results were as follows: -The variable cost per machine hour is

Management Accounting and Management Decisions

Cost Behaviour and Cost-Volume Relationships

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

Filters

Exam 3: Measurement of Cost Behaviour

The visual-fit method is highly subjective and is more reliable when the cost function of the data is linear.

Account analysis

The application of cost measures to expected future activity levels to forecast future costs is

The fixed costs required to achieve a desired level of production or to provide a desired level of service, while maintaining product or service attributes such as quality, are referred to as

The coefficient of determination indicates

Measuring a cost function objectively by using statistics to fit a cost function to all the data.

In the mixed-cost function, Y = F + VX, the V stands for

The process of completing a final product or service

A property tax is an example of a

Costs that change abruptly at intervals of activity because the resources and their costs come in indivisible chunks.

Understanding and quantifying how activities of an organization affect levels of costs.

Linear-cost behaviour

________ are costs that have no obvious relationship to levels of output activity but are determined as part of the periodic planning process.

The Stewart Company used regression analysis to predict the annual cost of utilities. The results were as follows: -The total fixed cost is

The first step in estimating or predicting costs is

Activity analysis is one method of approximating cost functions.

Costs that contain elements of both fixed and variable cost behaviour.

The Stewart Company used regression analysis to predict the annual cost of utilities. The results were as follows: -The variable cost per machine hour is

Management Accounting and Management Decisions

Cost Behaviour and Cost-Volume Relationships

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

Filters