Question 1

The use of high-technology methods rather than labor in manufacturing products usually means a much greater fixed-cost component to total costs.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) engineering analysis 
B) high-low method 
C) visual-fit method 
D) account analysis 
A) engineering analysis 
B) high-low method 
C) visual-fit method 
D) account analysis

Question 3

The visual-fit method is more objective than the engineering analysis method.

Accepted Answer

A) True 
 B)False

Question 4

In account analysis,users rely on the ________ for information about cost behavior.

Accepted Answer

A) management audit 
B) performance report 
C) value chain 
D) accounting system 
A) management audit 
B) performance report 
C) value chain 
D) accounting system

Question 5

The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service is called ________.

Accepted Answer

A) account analysis 
B) activity analysis 
C) cost measurement 
D) action analysis 
A) account analysis 
B) activity analysis 
C) cost measurement 
D) action analysis

Question 6

AAA Electric Company used least squares regression analysis to obtain the following output:
     Required: 
A)What is the total fixed cost of the payroll department?
B)What is the variable cost per employee for the payroll department?
C)What is the linear cost function?
D)What is the coefficient of determination? Comment on the goodness of fit.

Accepted Answer

A)$9,300 B)$3.102 C)Y = $9,300 + $3.102X

Question 7

A disadvantage of engineering analysis is ________.

Accepted Answer

A) it fails to produce a cost function 
B) the information produced may not be timely 
C) it is not acceptable under Generally Accepted Accounting Principles 
D) it cannot be used with mixed costs 
A) it fails to produce a cost function 
B) the information produced may not be timely 
C) it is not acceptable under Generally Accepted Accounting Principles 
D) it cannot be used with mixed costs

Question 8

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 of 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 of cost accounts and cost drivers

Question 9

Costs arising from the possession of facilities,equipment and a basic organizational structure are ________.

Accepted Answer

A) capacity costs 
B) discretionary costs 
C) committed fixed costs 
D) engineered costs 
A) capacity costs 
B) discretionary costs 
C) committed fixed costs 
D) engineered costs

Question 10

The Chev Company used regression analysis to predict the annual cost of utilities.The results were as follows:   The coefficient of determination is ________.

Accepted Answer

A) 0.8650 
B) 0.917 
C) 2.037 
D) 595 
A) 0.8650 
B) 0.917 
C) 2.037 
D) 595

Question 11

Account analysis is one method of approximating cost functions.

Accepted Answer

A) True 
 B)False

Question 12

Sunrise Motel's cost function is given as: Y = $50,000 + $7.50X
Where:
Y = annual custodial cost
X = number of guest-days of occupancy
In the current year,Sunrise Motel has 8,000 guest days.In the next year,Sunrise Motel expects an occupancy level of 10,000 guest days.(All costs next year will remain in the same relevant range as the current year.)What is the expected total custodial cost for next year?

Accepted Answer

A) $50,000 
B) $62,500 
C) $125,000 
D) $137,500 
A) $50,000 
B) $62,500 
C) $125,000 
D) $137,500

Question 13

________ is the first step in estimating or predicting costs.

Accepted Answer

A) Cost measurement 
B) Cost determination 
C) Cost driver identification 
D) Cost behavior investigation 
A) Cost measurement 
B) Cost determination 
C) Cost driver identification 
D) Cost behavior investigation

Question 14

________ contain elements of both fixed and variable cost behavior.

Accepted Answer

A) Committed fixed costs 
B) Discretionary fixed costs 
C) Capacity costs 
D) Mixed costs 
A) Committed fixed costs 
B) Discretionary fixed costs 
C) Capacity costs 
D) Mixed costs

Question 15

Companies can recover fixed capacity costs when demand falls during an economic downturn.

Accepted Answer

A) True 
 B)False

Question 16

The WE Energies 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) $2.1876 
B) $11.75 
C) $9,960 
D) $14,885 
A) $2.1876 
B) $11.75 
C) $9,960 
D) $14,885

Question 17

XX Company manufactures electronic devices.The company is considering three cost drivers for measuring maintenance costs in the factory.The following cost functions have been estimated using each cost driver:   Which cost driver should be chosen?

Accepted Answer

A) number of parts 
B) number of labor hours 
C) number of machine hours 
D) none of the above 
A) number of parts 
B) number of labor hours 
C) number of machine hours 
D) none of the above

Question 18

Several methods cannot be used to approximate a cost function.

Accepted Answer

A) True 
 B)False

Question 19

The methods to approximate cost functions are not ________; managers frequently use two or more together to avoid ________ in measuring cost behavior.

Accepted Answer

A) the same; duplication 
B) mutually exclusive; errors 
C) complementary; errors 
D) similar; duplication 
A) the same; duplication 
B) mutually exclusive; errors 
C) complementary; errors 
D) similar; duplication

Question 20

Activity analysis is used to ________.

Accepted Answer

A) identify relevant costs for decision making 
B) classify costs 
C) identify an appropriate cost driver 
D) predict future costs 
A) identify relevant costs for decision making 
B) classify costs 
C) identify an appropriate cost driver 
D) predict future costs

The use of high-technology methods rather than labor in manufacturing products usually means a much greater fixed-cost component to total costs.

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

The visual-fit method is more objective than the engineering analysis method.

In account analysis,users rely on the ________ for information about cost behavior.

The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service is called ________.

A disadvantage of engineering analysis is ________.

Account analysis ________.

Costs arising from the possession of facilities,equipment and a basic organizational structure are ________.

The Chev Company used regression analysis to predict the annual cost of utilities.The results were as follows: The coefficient of determination is ________.

Account analysis is one method of approximating cost functions.

________ is the first step in estimating or predicting costs.

________ contain elements of both fixed and variable cost behavior.

Companies can recover fixed capacity costs when demand falls during an economic downturn.

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

XX Company manufactures electronic devices.The company is considering three cost drivers for measuring maintenance costs in the factory.The following cost functions have been estimated using each cost driver: Which cost driver should be chosen?

Several methods cannot be used to approximate a cost function.

The methods to approximate cost functions are not ; managers frequently use two or more together to avoid in measuring cost behavior.

Activity analysis is used to ________.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 3: Measurement of Cost Behavior

The use of high-technology methods rather than labor in manufacturing products usually means a much greater fixed-cost component to total costs.

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

The visual-fit method is more objective than the engineering analysis method.

In account analysis,users rely on the ________ for information about cost behavior.

The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service is called ________.

A disadvantage of engineering analysis is ________.

Account analysis ________.

Costs arising from the possession of facilities,equipment and a basic organizational structure are ________.

The Chev Company used regression analysis to predict the annual cost of utilities.The results were as follows: The coefficient of determination is ________.

Account analysis is one method of approximating cost functions.

________ is the first step in estimating or predicting costs.

________ contain elements of both fixed and variable cost behavior.

Companies can recover fixed capacity costs when demand falls during an economic downturn.

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

XX Company manufactures electronic devices.The company is considering three cost drivers for measuring maintenance costs in the factory.The following cost functions have been estimated using each cost driver: Which cost driver should be chosen?

Several methods cannot be used to approximate a cost function.

The methods to approximate cost functions are not ________; managers frequently use two or more together to avoid ________ in measuring cost behavior.

Activity analysis is used to ________.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

The methods to approximate cost functions are not ; managers frequently use two or more together to avoid in measuring cost behavior.