Question 1

The rental of a car, which includes a fixed daily rate plus an extra fee for each mile driven, is an example of a step cost.

Accepted Answer

A) True 
 B)False

Question 2

Capacity costs are large, indivisible chunks of cost that the organization is obligated to incur or usually would not consider avoiding.

Accepted Answer

A) True 
 B)False

Question 3

Each cost in a manufacturing operation must be either fixed or variable and must be identified with a single cost driver.

Accepted Answer

A) True 
 B)False

Question 4

________ are the fixed costs of being able to achieve a desired level of production or to provide a desired level of service, while maintaining product or service attributes, such as quality.

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 5

Which symbol in the mixed-cost function, Y = F + VX, indicates the intercept?

Accepted Answer

A)  F 
B)  V 
C)  Y 
D)  X 
A)  F 
B)  V 
C)  Y 
D)  X

Question 6

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 coefficient of determination costs is

Accepted Answer

A)  0.73. 
B)  0.81. 
C)  0.90. 
D)  1.00. 
A)  0.73. 
B)  0.81. 
C)  0.90. 
D)  1.00.

Question 7

Research and development costs are an example of

Accepted Answer

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

Question 8

Cost measurement is the first step in estimating or predicting costs as a function of appropriate cost drivers.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)  0.437525. 
B)  12. 
C)  2.35. 
D)  0.9183. 
A)  0.437525. 
B)  12. 
C)  2.35. 
D)  0.9183.

Question 10

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 11

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 fixed portion of maintenance costs is

Accepted Answer

A)  $165,000. 
B)  $200,000. 
C)  $224,000. 
D)  $300,000. 
A)  $165,000. 
B)  $200,000. 
C)  $224,000. 
D)  $300,000.

Question 12

Advertising cost is an example of a

Accepted Answer

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

Question 13

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 variable component for maintenance costs is

Accepted Answer

A)  $37.80. 
B)  $42.00. 
C)  $46.67. 
D)  $47.00. 
A)  $37.80. 
B)  $42.00. 
C)  $46.67. 
D)  $47.00.

Question 14

When graphing a cost function, the total variable cost is the intercept, which is the point on the vertical axis where the cost function begins.

Accepted Answer

A) True 
 B)False

Question 15

Activity that can be graphed with a straight line when a cost changes proportionately with changes in a cost driver.

Accepted Answer

Linear cos

Question 16

Selecting a volume-related cost driver and classifying each account as a variable cost or as a fixed cost.

Accepted Answer

The answer of Selecting a volume-related cost driver and classifying...

Question 17

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.
  
-If 5,000 machine hours are scheduled, an estimate of maintenance costs is

Accepted Answer

A)  $253,318. 
B)  $230,726. 
C)  $230,360. 
D)  $230,318. 
A)  $253,318. 
B)  $230,726. 
C)  $230,360. 
D)  $230,318.

Question 18

The Schmidt Company used regression analysis to predict the annual cost of indirect materials. The results were as follows:  
-The independent variable (activity) selected should have a high degree of correlation with the dependent variable (cost) as indicated by a coefficient of determination that is:

Accepted Answer

A)  close to -1 
B)  close to +1 
C)  equal to 0 
D)  none of the above 
A)  close to -1 
B)  close to +1 
C)  equal to 0 
D)  none of the above

Question 19

An algebraic equation used by managers to describe the relationship between a cost and its cost driver(s).

Accepted Answer

The answer of An algebraic equation used by managers to...

Question 20

Costs determined by management as part of the periodic planning process in order to meet the organization's goals are

Accepted Answer

A)  discretionary fixed costs. 
B)  engineered costs. 
C)  mixed costs. 
D)  step costs. 
A)  discretionary fixed costs. 
B)  engineered costs. 
C)  mixed costs. 
D)  step costs.

The rental of a car, which includes a fixed daily rate plus an extra fee for each mile driven, is an example of a step cost.

Capacity costs are large, indivisible chunks of cost that the organization is obligated to incur or usually would not consider avoiding.

Each cost in a manufacturing operation must be either fixed or variable and must be identified with a single cost driver.

________ are the fixed costs of being able to achieve a desired level of production or to provide a desired level of service, while maintaining product or service attributes, such as quality.

Which symbol in the mixed-cost function, Y = F + VX, indicates the intercept?

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 coefficient of determination costs is

Research and development costs are an example of

Cost measurement is the first step in estimating or predicting costs as a function of appropriate cost drivers.

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

The following three data points appear to be

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 fixed portion of maintenance costs is

Advertising cost is an example of a

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 variable component for maintenance costs is

When graphing a cost function, the total variable cost is the intercept, which is the point on the vertical axis where the cost function begins.

Activity that can be graphed with a straight line when a cost changes proportionately with changes in a cost driver.

Selecting a volume-related cost driver and classifying each account as a variable cost or as a fixed 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. -If 5,000 machine hours are scheduled, an estimate of maintenance costs is

An algebraic equation used by managers to describe the relationship between a cost and its cost driver(s).

Costs determined by management as part of the periodic planning process in order to meet the organization's goals are

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 rental of a car, which includes a fixed daily rate plus an extra fee for each mile driven, is an example of a step cost.

Capacity costs are large, indivisible chunks of cost that the organization is obligated to incur or usually would not consider avoiding.

Each cost in a manufacturing operation must be either fixed or variable and must be identified with a single cost driver.

________ are the fixed costs of being able to achieve a desired level of production or to provide a desired level of service, while maintaining product or service attributes, such as quality.

Which symbol in the mixed-cost function, Y = F + VX, indicates the intercept?

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 coefficient of determination costs is

Research and development costs are an example of

Cost measurement is the first step in estimating or predicting costs as a function of appropriate cost drivers.

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

The following three data points appear to be

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 fixed portion of maintenance costs is

Advertising cost is an example of a

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 variable component for maintenance costs is

When graphing a cost function, the total variable cost is the intercept, which is the point on the vertical axis where the cost function begins.

Activity that can be graphed with a straight line when a cost changes proportionately with changes in a cost driver.

Selecting a volume-related cost driver and classifying each account as a variable cost or as a fixed 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. -If 5,000 machine hours are scheduled, an estimate of maintenance costs is

An algebraic equation used by managers to describe the relationship between a cost and its cost driver(s).

Costs determined by management as part of the periodic planning process in order to meet the organization's goals are

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