Question 1

If a scatterplot reveals a fairly weak relationship between cost and volume, the manager should select a different activity for modeling cost behavior.

Accepted Answer

A) True 
 B)False

Question 2

When performing account analysis, managers decide how to classify each account as a variable, fixed or mixed cost.

Accepted Answer

A) True 
 B)False

Question 3

Relevant range is the range of activity (volume)over which total fixed costs and variable costs per unit can be assumed to remain the same.

Accepted Answer

A) True 
 B)False

Question 4

What variable represents the volume of activity in the equation: y = vx + f? (Assume v represents the variable cost per unit of activity.)

Accepted Answer

A) v 
B) x 
C) y 
D) vx 
A) v 
B) x 
C) y 
D) vx

Question 5

In the equation y = $11.75x + $550, "x" represents

Accepted Answer

A) number of units produced. 
B) total fixed costs. 
C) total costs. 
D) none of the above. 
A) number of units produced. 
B) total fixed costs. 
C) total costs. 
D) none of the above.

Question 6

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 = 89,500
X Variable 1 Coefficient = 62.50
R-square = 0.9855
What is the company's monthly cost equation?

Accepted Answer

A) y = $98.55x + $89,500 
B) y = $62.50x + $89,500 
C) y = $89,500x + $62.98 
D) y = $89,500x + $98.55 
A) y = $98.55x + $89,500 
B) y = $62.50x + $89,500 
C) y = $89,500x + $62.98 
D) y = $89,500x + $98.55

Question 7

Using account analysis, what type of cost is the local phone service which charges a flat fee for unlimited local calls?

Accepted Answer

A) Step 
B) Mixed 
C) Fixed 
D) Variable 
A) Step 
B) Mixed 
C) Fixed 
D) Variable

Question 8

The Heartlake Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year.   Using variable costing, what is the operating income for last year?

Accepted Answer

A) $1,275,000 
B) $117,000 
C) $447,000 
D) $282,000 
A) $1,275,000 
B) $117,000 
C) $447,000 
D) $282,000

Question 9

The Heartlake Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year.   Using absorption costing, what is gross profit for last month? (Round any intermediary calculations to the nearest cent.)

Accepted Answer

A) $1,054,000 
B) $1,734,000 
C) $1,394,000 
D) $340,000 
A) $1,054,000 
B) $1,734,000 
C) $1,394,000 
D) $340,000

Question 10

The R-squared statistic determined by regression analysis is sometimes referred to as the "goodness-of-fit" statistic.

Accepted Answer

A) True 
 B)False

Question 11

The fixed cost per unit of activity varies with changes in volume.

Accepted Answer

A) True 
 B)False

Question 12

How is operating income affected if the number of units sold exceeds the number of units produced?

Accepted Answer

A) Operating income would be higher under a variable costing income statement. 
B) Operating income would be lower under a variable costing income statement. 
C) Operating income would be higher under an absorption costing income statement. 
D) Operating income would be the same under both a variable costing and absorption costing income statement. 
A) Operating income would be higher under a variable costing income statement. 
B) Operating income would be lower under a variable costing income statement. 
C) Operating income would be higher under an absorption costing income statement. 
D) Operating income would be the same under both a variable costing and absorption costing income statement.

Question 13

If the data points in a scatter plot fall in a fairly straight line, it means that there is a fairly strong relationship between cost and volume.

Accepted Answer

A) True 
 B)False

Question 14

Best Birdies produces ornate birdcages. The company's average cost per unit is $23 when it produces 2600 birdcages. If $5900 of the total costs are fixed, what is the variable cost of producing each birdcage?

Accepted Answer

A) $2.27 
B) $53,900.00 
C) $23.00 
D) $20.73 
A) $2.27 
B) $53,900.00 
C) $23.00 
D) $20.73

Question 15

When graphing total fixed costs, the fixed cost per unit is the slope of the fixed cost line.

Accepted Answer

A) True 
 B)False

Question 16

When using the high-low method, what is the correct order of the following three steps? i. write the cost equation
Ii) find the vertical intercept
Iii) find the slope

Accepted Answer

A) i, ii, iii 
B) ii, iii, i 
C) iii, ii, i 
D) iii, i, ii 
A) i, ii, iii 
B) ii, iii, i 
C) iii, ii, i 
D) iii, i, ii

Question 17

Managers whose bonuses are based on operating income have more incentive to increase inventory levels when variable costing is used than when absorption costing is used.

Accepted Answer

A) True 
 B)False

Question 18

Sea Side Enterprises is trying to predict the cost associated with producing its anchors. At a production level of 5100 anchors, Sea Side Enterprises' average cost per anchor is $53 If $17,000 of the total costs are fixed, what is the variable cost of producing each anchor?

Accepted Answer

A) $3.33 
B) $49.67 
C) $320.75 
D) $53.00 
A) $3.33 
B) $49.67 
C) $320.75 
D) $53.00

Question 19

The income statement is organized by ________ under absorption costing.

Accepted Answer

A) period costs only 
B) fixed costs only 
C) variable costs only 
D) product and period costs 
A) period costs only 
B) fixed costs only 
C) variable costs only 
D) product and period costs

Question 20

The line determined by regression analysis is sometimes referred to as the "line of worst fit."

Accepted Answer

A) True 
 B)False

If a scatterplot reveals a fairly weak relationship between cost and volume, the manager should select a different activity for modeling cost behavior.

When performing account analysis, managers decide how to classify each account as a variable, fixed or mixed cost.

Relevant range is the range of activity (volume)over which total fixed costs and variable costs per unit can be assumed to remain the same.

What variable represents the volume of activity in the equation: y = vx + f? (Assume v represents the variable cost per unit of activity.)

In the equation y = $11.75x + $550, "x" represents

Using account analysis, what type of cost is the local phone service which charges a flat fee for unlimited local calls?

The Heartlake Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year. Using variable costing, what is the operating income for last year?

The Heartlake Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year. Using absorption costing, what is gross profit for last month? (Round any intermediary calculations to the nearest cent.)

The R-squared statistic determined by regression analysis is sometimes referred to as the "goodness-of-fit" statistic.

The fixed cost per unit of activity varies with changes in volume.

How is operating income affected if the number of units sold exceeds the number of units produced?

If the data points in a scatter plot fall in a fairly straight line, it means that there is a fairly strong relationship between cost and volume.

Best Birdies produces ornate birdcages. The company's average cost per unit is $23 when it produces 2600 birdcages. If $5900 of the total costs are fixed, what is the variable cost of producing each birdcage?

When graphing total fixed costs, the fixed cost per unit is the slope of the fixed cost line.

When using the high-low method, what is the correct order of the following three steps? i. write the cost equation Ii) find the vertical intercept Iii) find the slope

Managers whose bonuses are based on operating income have more incentive to increase inventory levels when variable costing is used than when absorption costing is used.

Sea Side Enterprises is trying to predict the cost associated with producing its anchors. At a production level of 5100 anchors, Sea Side Enterprises' average cost per anchor is $53 If $17,000 of the total costs are fixed, what is the variable cost of producing each anchor?

The income statement is organized by ________ under absorption costing.

The line determined by regression analysis is sometimes referred to as the "line of worst fit."

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 6: Cost Behavior

If a scatterplot reveals a fairly weak relationship between cost and volume, the manager should select a different activity for modeling cost behavior.

When performing account analysis, managers decide how to classify each account as a variable, fixed or mixed cost.

Relevant range is the range of activity (volume)over which total fixed costs and variable costs per unit can be assumed to remain the same.

What variable represents the volume of activity in the equation: y = vx + f? (Assume v represents the variable cost per unit of activity.)

In the equation y = $11.75x + $550, "x" represents

Using account analysis, what type of cost is the local phone service which charges a flat fee for unlimited local calls?

The Heartlake Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year. Using variable costing, what is the operating income for last year?

The Heartlake Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year. Using absorption costing, what is gross profit for last month? (Round any intermediary calculations to the nearest cent.)

The R-squared statistic determined by regression analysis is sometimes referred to as the "goodness-of-fit" statistic.

The fixed cost per unit of activity varies with changes in volume.

How is operating income affected if the number of units sold exceeds the number of units produced?

If the data points in a scatter plot fall in a fairly straight line, it means that there is a fairly strong relationship between cost and volume.

Best Birdies produces ornate birdcages. The company's average cost per unit is $23 when it produces 2600 birdcages. If $5900 of the total costs are fixed, what is the variable cost of producing each birdcage?

When graphing total fixed costs, the fixed cost per unit is the slope of the fixed cost line.

When using the high-low method, what is the correct order of the following three steps? i. write the cost equation Ii) find the vertical intercept Iii) find the slope

Managers whose bonuses are based on operating income have more incentive to increase inventory levels when variable costing is used than when absorption costing is used.

Sea Side Enterprises is trying to predict the cost associated with producing its anchors. At a production level of 5100 anchors, Sea Side Enterprises' average cost per anchor is $53 If $17,000 of the total costs are fixed, what is the variable cost of producing each anchor?

The income statement is organized by ________ under absorption costing.

The line determined by regression analysis is sometimes referred to as the "line of worst fit."

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters