Question 1

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

Accepted Answer

A)  912. 
B)  $4,378. 
C)  $918. 
D)  $4,020. 
A)  912. 
B)  $4,378. 
C)  $918. 
D)  $4,020.

Question 2

Which of the following is NOT a method of approximating cost functions?

Accepted Answer

A)  Engineering analysis 
B)  Account analysis 
C)  Product analysis 
D)  High-low analysis 
A)  Engineering analysis 
B)  Account analysis 
C)  Product analysis 
D)  High-low analysis

Question 3

Explain the difference between a step cost and a mixed cost.

Accepted Answer

A step cost changes abruptly at interval

Question 4

Use the following information to answer the next question(s).
The method of least squares produced the following computer printout using direct labour hours as the activity.
  
-The estimate of the fixed component for maintenance costs is

Accepted Answer

A)  $18,286. 
B)  $20,276. 
C)  $20,318. 
D)  $20,360. 
A)  $18,286. 
B)  $20,276. 
C)  $20,318. 
D)  $20,360.

Question 5

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 variable cost per unit is

Accepted Answer

A)  $0.38. 
B)  $0.46. 
C)  $2.60. 
D)  $2.16. 
A)  $0.38. 
B)  $0.46. 
C)  $2.60. 
D)  $2.16.

Question 6

A cost driver, sometimes referred to as the independent variable, is part of the cost function relationship.

Accepted Answer

A) True 
 B)False

Question 7

________ are costs arising from the possession of facilities, equipment, and a basic organization.

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 8

The first step in estimating or predicting costs as a function of appropriate cost drivers.

Accepted Answer

The answer of The first step in estimating or predicting...

Question 9

The high-low method is a reliable method of cost estimation.

Accepted Answer

A) True 
 B)False

Question 10

Use the following information to answer the next question(s).
The following information was collected regarding maintenance costs at different activity levels measured in machine hours:
  
-Using the high-low method, an estimate of the variable component for maintenance costs is

Accepted Answer

A)  $50.00. 
B)  $52.50. 
C)  $64.28. 
D)  $75.00. 
A)  $50.00. 
B)  $52.50. 
C)  $64.28. 
D)  $75.00.

Question 11

Presented below is the production data for the last six months of the year for the mixed costs incurred by Vignovich Company.
   Vignovich Company uses the high-low method to analyze mixed costs.
-The total cost at an operating level of 10,000 units would be

Accepted Answer

A)  $31,136. 
B)  $30,200. 
C)  $21,416. 
D)  $42,550. 
A)  $31,136. 
B)  $30,200. 
C)  $21,416. 
D)  $42,550.

Question 12

Measuring cost behaviour involves understanding and quantifying how activities of an organization affect levels of costs.

Accepted Answer

A) True 
 B)False

Question 13

Plausibility and reliability are two relevant factors to consider in order to ensure accurate and useful cost functions.

Accepted Answer

A) True 
 B)False

Question 14

In the mixed-cost function, Y = F + VX, the X 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 15

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

Accepted Answer

The answer of The application of cost measures to expected...

Question 16

Cost behaviour can be graphed with a straight line when a cost changes proportionately with changes in a cost driver.

Accepted Answer

A) True 
 B)False

Question 17

Explain the difference between committed fixed costs and discretionary fixed costs and give an example of each.

Accepted Answer

Committed fixed costs usually arise from

Question 18

Explain management influences on cost behaviour.

Accepted Answer

Management can influence cost behaviour

Question 19

The following three data points appear to be

Accepted Answer

A)  a variable cost. 
B)  a mixed cost. 
C)  a fixed cost. 
D)  a step cost. 
A)  a variable cost. 
B)  a mixed cost. 
C)  a fixed cost. 
D)  a step cost.

Question 20

Presented below is the production data for the last six months of the year for the mixed costs incurred by Vignovich Company.
   Vignovich Company uses the high-low method to analyze mixed costs.
-The cost function would be stated as

Accepted Answer

A)  Y = $ 2,200 + $2.80X. 
B)  Y = $17,816 + $0.36X. 
C)  Y = $ 536 + $3.06X. 
D)  Y = $39,250 + $0.33X. 
A)  Y = $ 2,200 + $2.80X. 
B)  Y = $17,816 + $0.36X. 
C)  Y = $ 536 + $3.06X. 
D)  Y = $39,250 + $0.33X.

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

Which of the following is NOT a method of approximating cost functions?

Explain the difference between a step cost and a mixed cost.

Use the following information to answer the next question(s). The method of least squares produced the following computer printout using direct labour hours as the activity. -The estimate of the fixed component for maintenance costs is

A cost driver, sometimes referred to as the independent variable, is part of the cost function relationship.

________ are costs arising from the possession of facilities, equipment, and a basic organization.

The first step in estimating or predicting costs as a function of appropriate cost drivers.

The high-low method is a reliable method of cost estimation.

Use the following information to answer the next question(s). The following information was collected regarding maintenance costs at different activity levels measured in machine hours: -Using the high-low method, an estimate of the variable component for maintenance costs is

Presented below is the production data for the last six months of the year for the mixed costs incurred by Vignovich Company. Vignovich Company uses the high-low method to analyze mixed costs. -The total cost at an operating level of 10,000 units would be

Measuring cost behaviour involves understanding and quantifying how activities of an organization affect levels of costs.

Plausibility and reliability are two relevant factors to consider in order to ensure accurate and useful cost functions.

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

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

Cost behaviour can be graphed with a straight line when a cost changes proportionately with changes in a cost driver.

Explain the difference between committed fixed costs and discretionary fixed costs and give an example of each.

Explain management influences on cost behaviour.

The following three data points appear to be

Presented below is the production data for the last six months of the year for the mixed costs incurred by Vignovich Company. Vignovich Company uses the high-low method to analyze mixed costs. -The cost function would be stated as

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

Which of the following is NOT a method of approximating cost functions?

Explain the difference between a step cost and a mixed cost.

Use the following information to answer the next question(s). The method of least squares produced the following computer printout using direct labour hours as the activity. -The estimate of the fixed component for maintenance costs is

A cost driver, sometimes referred to as the independent variable, is part of the cost function relationship.

________ are costs arising from the possession of facilities, equipment, and a basic organization.

The first step in estimating or predicting costs as a function of appropriate cost drivers.

The high-low method is a reliable method of cost estimation.

Use the following information to answer the next question(s). The following information was collected regarding maintenance costs at different activity levels measured in machine hours: -Using the high-low method, an estimate of the variable component for maintenance costs is

Presented below is the production data for the last six months of the year for the mixed costs incurred by Vignovich Company. Vignovich Company uses the high-low method to analyze mixed costs. -The total cost at an operating level of 10,000 units would be

Measuring cost behaviour involves understanding and quantifying how activities of an organization affect levels of costs.

Plausibility and reliability are two relevant factors to consider in order to ensure accurate and useful cost functions.

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

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

Cost behaviour can be graphed with a straight line when a cost changes proportionately with changes in a cost driver.

Explain the difference between committed fixed costs and discretionary fixed costs and give an example of each.

Explain management influences on cost behaviour.

The following three data points appear to be

Presented below is the production data for the last six months of the year for the mixed costs incurred by Vignovich Company. Vignovich Company uses the high-low method to analyze mixed costs. -The cost function would be stated as

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