Exam 6: Cost Behavior

Pelicans Ice is a snow cone stand near the local park. To plan for the future, Pelicans Ice wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served. Using the high-low method, the fixed costs for a month are

If a manager sees a potential outlier in the data, he or she should first determine whether the data is correct.

Board Games, Inc. makes board games. The following data pertains to the last six months: Based on this data, what is the linear cost equation?

Describe the scatterplot method. Discuss the advantages and disadvantages of using the scatterplot method.

Your client's company wants to determine the relationship between its monthly operating costs and a potential cost driver. The output of regression analysis showed the following information: Intercept Coefficient = 75,828 X Variable 1 Coefficient = 52.61 R-square = 0.9756 Should your client use this information to predict monthly operating costs?

The managerial accountant at the Bookcase Factory prefers regression analysis to the high-low method because it is a more accurate method. The managerial accountant uses regression output and analyzes the following data to predict future costs: y =$250x + $625 Where, Y = total monthly utility cost X = number of guests What is the intercept coefficient, or the vertical intercept of the fixed cost line, in the equation listed above?

The representation for fixed cost per unit of activity is

The following data pertain to costs at Massey Company: The fixed cost per unit is

Pablo was reviewing the water bill for his carwash business and determined that the highest bill, $5400, occurred in July when 2700 cars were washed and the lowest bill, $3100, occurred in February when 1500 cars were washed. What was the variable cost per carwash?

Using account analysis, what type of cost is Satellite TV when the charge is $45.00 per month plus $5.99 for pay-per-view movies?

Which of the following would be considered a committed fixed cost?

Maintenance costs at Seaside Manufacturing over the past six months are listed in the following table. Using the high-low method, what would the variable maintenance cost per machine hour be?

Within the relevant range, which of the following statements is true with respect to fixed costs per unit?

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.

The Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7600 bats to be $13. Given this information, what would be the total cost of producing 7600 baseball bats?

When a company produces more units than it sells, absorption costing operating income will be higher than variable costing operating income.

To follow is information about the units produced and total manufacturing costs for Pine Enterprises for the past six months. Using the high-low method, what is the monthly fixed manufacturing cost? (Round any intermediary calculations to the nearest cent.)

Using account analysis, what type of cost is the fee the airline company charges for your bags assuming a typical policy is $25 if the bag weighs between 0 and 50 lbs.; $75 if the bag weighs between 50 and 75 lbs. and $125 if the bag weighs between 75 and 100 lbs?

Which type of costing system is the only acceptable costing system for external financial reporting?

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