Question 1

When preparing a scatter plot,how should the data be graphed?

Accepted Answer

A) Cost data on the y-axis 
B) Cost data on the x-axis 
C) Volume data on the y-axis 
D) Volume data on the z-axis 
A) Cost data on the y-axis 
B) Cost data on the x-axis 
C) Volume data on the y-axis 
D) Volume data on the z-axis

Question 2

Vanco Industries wanted to determine the relationship between its monthly operating costs and a potential cost driver,machine hours.The output of a regression analysis showed the following information (note: only a portion of the regression analysis results is presented here.)  
- What is the cost equation based upon the results of the regression analysis?

Accepted Answer

A) y = $0.90x 
B) y = $0.90 + $2,413.21 
C) y = $2,413.21x + $0.90 
D) y = $2,413.21 + $0.90x 
A) y = $0.90x 
B) y = $0.90 + $2,413.21 
C) y = $2,413.21x + $0.90 
D) y = $2,413.21 + $0.90x

Question 3

A basic tenet of variable costing is that fixed manufacturing overhead costs be currently expensed.What is the rationale behind this?

Accepted Answer

A) Fixed manufacturing overhead costs occur regardless of level of production. 
B) Fixed manufacturing overhead costs are generally immaterial in amount. 
C) Allocation of fixed manufacturing costs are arbitrary at best. 
D) Fixed manufacturing costs change as production changes. 
A) Fixed manufacturing overhead costs occur regardless of level of production. 
B) Fixed manufacturing overhead costs are generally immaterial in amount. 
C) Allocation of fixed manufacturing costs are arbitrary at best. 
D) Fixed manufacturing costs change as production changes.

Question 4

Sunny's Frozen Treats is a snow cone stand near the local park.To plan for the future,Sunny wants to determine his cost behavior patterns.He has the following information available about his operating costs and the number of snow cones served. $$\begin{array} { | l | c | c | } 
\hline \text { Month } & \text { Number af snow cones } & \text { Total operating costs } \
\hline \text { January } & 7,200 & \$ 4,700 \
\hline \text { February } & 8,000 & \$ 5,800 \
\hline \text { March } & 6,000 & \$ 4,600 \
\hline \text { April } & 6,600 & \$ 4,500 \
\hline \text { May } & 7,700 & \$ 5,100 \
\hline \text { June } & 7,250 & \$ 5,000 \
\hline
\end{array}$$ 
-The variable cost per snow cone using the high-low method is:

Accepted Answer

A) $1.67. 
B) $0.73. 
C) $0.77. 
D) $0.60. 
A) $1.67. 
B) $0.73. 
C) $0.77. 
D) $0.60.

Question 5

The contribution margin income statement presents _________ above the contribution margin line.

Accepted Answer

A) only variable expenses relating to selling and administrative activities 
B) only fixed expenses relating to selling and administrative activities 
C) all variable expenses 
D) all fixed expenses 
A) only variable expenses relating to selling and administrative activities 
B) only fixed expenses relating to selling and administrative activities 
C) all variable expenses 
D) all fixed expenses

Question 6

If inventory has grown,operating income will be higher under variable costing than it is under absorption costing.

Accepted Answer

A) True 
 B)False

Question 7

Total fixed costs change in response to changes in the volume of production.

Accepted Answer

A) True 
 B)False

Question 8

Total mixed cost graphs slope upward,but do not begin at the origin.

Accepted Answer

A) True 
 B)False

Question 9

Managers often approximate curvilinear costs and step costs as mixed costs.

Accepted Answer

A) True 
 B)False

Question 10

Ricco was reviewing the water bill for his carwash business and determined that the highest bill,$6,000,occurred in July when 2,000 cars were washed and the lowest bill,$4,500,occurred in February when 1,000 cars were washed.What was the fixed portion of the water bill?

Accepted Answer

A) $3,000 
B) $5,000 
C) $5,250 
D) $1,500 
A) $3,000 
B) $5,000 
C) $5,250 
D) $1,500

Question 11

Toby's Farm Store buys portable generators for $500 and sells them for $800.He pays a sales commission of 5% of sales revenue to his sales staff.Toby pays $2,000 a month rent for his store,and also pays $1,800 a month to his staff in addition to the commissions.Toby sold 200 generators in June.
-If Toby prepares a contribution margin income statement for the month of June,what would be his contribution margin?

Accepted Answer

A) $268,000 
B) $160,000 
C) $52,000 
D) $108,000 
A) $268,000 
B) $160,000 
C) $52,000 
D) $108,000

Question 12

Traditional income statements are organized by function,not by cost behavior

Accepted Answer

A) True 
 B)False

Question 13

On a contribution margin income statement,sales revenue less variable expenses equals:

Accepted Answer

A) contribution margin. 
B) gross profit. 
C) operating income. 
D) expenses. 
A) contribution margin. 
B) gross profit. 
C) operating income. 
D) expenses.

Question 14

Under absorption costing,variable manufacturing costs are treated as period costs.

Accepted Answer

A) True 
 B)False

Question 15

The cost equation determined by regression analysis is usually less accurate than the line determined by the high-low method.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following equations represents the total mixed cost?

Accepted Answer

A) y = vx + f 
B) y = vx 
C) y = f 
D) y = v + f 
A) y = vx + f 
B) y = vx 
C) y = f 
D) y = v + f

Question 17

The X Variable 1 Coefficient in regression analysis yields the variable cost per unit of activity.

Accepted Answer

A) True 
 B)False

Question 18

On a traditional income statement,all costs related to the production or purchases stage of the value chain that are associated with units sold,are listed:

Accepted Answer

A) above the contribution margin line. 
B) above the gross profit line. 
C) below the operating income line. 
D) above the sales line. 
A) above the contribution margin line. 
B) above the gross profit line. 
C) below the operating income line. 
D) above the sales line.

Question 19

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

Accepted Answer

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

Question 20

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

Accepted Answer

The scattergraph method involves plottin

When preparing a scatter plot,how should the data be graphed?

A basic tenet of variable costing is that fixed manufacturing overhead costs be currently expensed.What is the rationale behind this?

The contribution margin income statement presents _________ above the contribution margin line.

If inventory has grown,operating income will be higher under variable costing than it is under absorption costing.

Total fixed costs change in response to changes in the volume of production.

Total mixed cost graphs slope upward,but do not begin at the origin.

Managers often approximate curvilinear costs and step costs as mixed costs.

Ricco was reviewing the water bill for his carwash business and determined that the highest bill,$6,000,occurred in July when 2,000 cars were washed and the lowest bill,$4,500,occurred in February when 1,000 cars were washed.What was the fixed portion of the water bill?

Traditional income statements are organized by function,not by cost behavior

On a contribution margin income statement,sales revenue less variable expenses equals:

Under absorption costing,variable manufacturing costs are treated as period costs.

The cost equation determined by regression analysis is usually less accurate than the line determined by the high-low method.

Which of the following equations represents the total mixed cost?

The X Variable 1 Coefficient in regression analysis yields the variable cost per unit of activity.

On a traditional income statement,all costs related to the production or purchases stage of the value chain that are associated with units sold,are listed:

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

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

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Production, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Short Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 6: Cost Behavior

When preparing a scatter plot,how should the data be graphed?

A basic tenet of variable costing is that fixed manufacturing overhead costs be currently expensed.What is the rationale behind this?

The contribution margin income statement presents _________ above the contribution margin line.

If inventory has grown,operating income will be higher under variable costing than it is under absorption costing.

Total fixed costs change in response to changes in the volume of production.

Total mixed cost graphs slope upward,but do not begin at the origin.

Managers often approximate curvilinear costs and step costs as mixed costs.

Ricco was reviewing the water bill for his carwash business and determined that the highest bill,$6,000,occurred in July when 2,000 cars were washed and the lowest bill,$4,500,occurred in February when 1,000 cars were washed.What was the fixed portion of the water bill?

Traditional income statements are organized by function,not by cost behavior

On a contribution margin income statement,sales revenue less variable expenses equals:

Under absorption costing,variable manufacturing costs are treated as period costs.

The cost equation determined by regression analysis is usually less accurate than the line determined by the high-low method.

Which of the following equations represents the total mixed cost?

The X Variable 1 Coefficient in regression analysis yields the variable cost per unit of activity.

On a traditional income statement,all costs related to the production or purchases stage of the value chain that are associated with units sold,are listed:

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

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

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Production, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Short Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Filters