Question 1

Past cost information might be too unreliable for future cost estimation because

Accepted Answer

A)  An organisation has been operating too long in a stable environment 
B)  The costs are primarily mixed 
C)  A company has added a new product line 
D)  Managers expect no changes in the cost function 
A)  An organisation has been operating too long in a stable environment 
B)  The costs are primarily mixed 
C)  A company has added a new product line 
D)  Managers expect no changes in the cost function C

Question 2

Consider the following cost data for the cost object, number of machine setups. Each set of costs (A, B, and C) is from a different type of manufacturing operation and represents the cost behavior for the cost of that company's machine setups.   Cost A is best described as

Accepted Answer

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

Question 3

The high-low method is a specific application of the two-point method of cost estimation.

Accepted Answer

A) True 
 B)False  True

Question 4

The best source for determining historical costs is usually

Accepted Answer

A)  The Internet 
B)  Interviews with managers 
C)  The company's accounting information system 
D)  Financial statements 
A)  The Internet 
B)  Interviews with managers 
C)  The company's accounting information system 
D)  Financial statements

Question 5

In a regression equation, fixed costs are represented by the

Accepted Answer

A)  Slope 
B)  Intercept 
C)  Error term 
D)  Adjusted R-square coefficient 
A)  Slope 
B)  Intercept 
C)  Error term 
D)  Adjusted R-square coefficient

Question 6

Reviewing cost behavior patterns over time from the accounting records and using that review to predict future costs best describes

Accepted Answer

A)  Regression analysis 
B)  Scatter plots 
C)  Analysis at the account level 
D)  Two-point methods 
A)  Regression analysis 
B)  Scatter plots 
C)  Analysis at the account level 
D)  Two-point methods

Question 7

Simple regression minimises the distance from each data point to

Accepted Answer

A)  A trend line 
B)  The y-intercept 
C)  The error term 
D)  The x-axis 
A)  A trend line 
B)  The y-intercept 
C)  The error term 
D)  The x-axis

Question 8

Estimating a cost function using past cost data to help determine future costs is useful if

Accepted Answer

A)  Past costs are irrelevant and highly discretionary 
B)  Past costs are irrelevant and not discretionary 
C)  Past costs are relevant and highly discretionary 
D)  Past costs are relevant and not discretionary 
A)  Past costs are irrelevant and highly discretionary 
B)  Past costs are irrelevant and not discretionary 
C)  Past costs are relevant and highly discretionary 
D)  Past costs are relevant and not discretionary

Question 9

Financial statements usually distinguish between fixed and variable costs.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following techniques for cost estimation relies on visual analysis?

Accepted Answer

A)  Scatter plots 
B)  Analysis at the account level 
C)  High-low method 
D)  Engineered estimate of cost 
A)  Scatter plots 
B)  Analysis at the account level 
C)  High-low method 
D)  Engineered estimate of cost

Question 11

Liva Company wants to develop a cost function for its maintenance costs to estimate such costs for the coming year. The following data are available:

Accepted Answer

A)  $500 + $1.00 per direct labor hour 
B)  $300 + $1.50 per direct labor hour 
C)  $100 + $0.20 per direct labor hour 
D)  $200 + $0.10 per direct labor hour 
A)  $500 + $1.00 per direct labor hour 
B)  $300 + $1.50 per direct labor hour 
C)  $100 + $0.20 per direct labor hour 
D)  $200 + $0.10 per direct labor hour

Question 12

Liva Company wants to develop a cost function for its maintenance costs to estimate such costs for the coming year. The following data are available:   Using the high-low method, what is the variable maintenance cost per direct labor hour?

Accepted Answer

A)  $1.00 
B)  $0.10 
C)  $0.20 
D)  $1.50 
A)  $1.00 
B)  $0.10 
C)  $0.20 
D)  $1.50

Question 13

Which statement is false?

Accepted Answer

A)  Information for some costs cannot easily be obtained from the accounting information system. 
B)  Useful cost information is rarely available from the accounting information system. 
C)  The accounting system design affects the availability of useful cost information. 
D)  The nature of cost information affects its usefulness for decision making. 
A)  Information for some costs cannot easily be obtained from the accounting information system. 
B)  Useful cost information is rarely available from the accounting information system. 
C)  The accounting system design affects the availability of useful cost information. 
D)  The nature of cost information affects its usefulness for decision making.

Question 14

Consider the following cost data for the cost object, number of machine setups. Each set of costs (A, B, and C) is from a different type of manufacturing operation and represents the cost behavior for the cost of that company's machine setups. Cost B is best described as

Accepted Answer

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

Question 15

Simple regression analysis differs from multiple regression analysis based on the number of

Accepted Answer

A)  Cost drivers used 
B)  Costs predicted 
C)  Data points incorporated 
D)  Personnel analysing the data 
A)  Cost drivers used 
B)  Costs predicted 
C)  Data points incorporated 
D)  Personnel analysing the data

Question 16

When estimating future costs, information quality is higher when

Accepted Answer

A)  Costs must be allocated 
B)  The accounting system can trace relevant costs to a cost object 
C)  The regression Adjusted R-square is near zero 
D)  Most costs are fixed, rather than variable 
A)  Costs must be allocated 
B)  The accounting system can trace relevant costs to a cost object 
C)  The regression Adjusted R-square is near zero 
D)  Most costs are fixed, rather than variable

Question 17

Which of the following cost estimation techniques makes assumptions about the data being analysed? I Analysis at the account level
II Two-point method
III Regression analysis

Accepted Answer

A)  I only 
B)  I and II only 
C)  II and III only 
D)  I, II, and III 
A)  I only 
B)  I and II only 
C)  II and III only 
D)  I, II, and III

Question 18

Janice's Kennel and Pet Spa is located in Sydney. The company employs three pet attendants, four pet groomers and two front office staff who book appointments and keep records. The spa provides a range of services for dogs and cats including boarding, grooming, and obedience training. The grooming area includes a small retail section that carries dog and cat food, pet supplies, and toys. Which of the following is a sunk cost for any cost object related to Janice's Kennel and Pet Spa?

Accepted Answer

A)  Cost of the car Janice is planning to buy for pet transportation 
B)  Cost of existing computer equipment used to keep company records 
C)  Cost of annual wages for full-time employees 
D)  Cost of rent for the next period 
A)  Cost of the car Janice is planning to buy for pet transportation 
B)  Cost of existing computer equipment used to keep company records 
C)  Cost of annual wages for full-time employees 
D)  Cost of rent for the next period

Question 19

In regression analysis, the Adjusted R-square statistic is used to evaluate how well the cost driver explains the behavior in the cost.

Accepted Answer

A) True 
 B)False

Question 20

Janice's Kennel and Pet Spa is located in Sydney. The company employs three pet attendants, four pet groomers and two front office staff who book appointments and keep records. The spa provides a range of services for dogs and cats including boarding, grooming, and obedience training. The grooming area includes a small retail section that carries dog and cat food, pet supplies, and toys. If the cost object is cost per day of boarding, which of the following is a direct cost?

Accepted Answer

A)  Pet food 
B)  Front office staff salaries 
C)  Grooming supplies 
D)  Depreciation on shelving and equipment used in the grooming and retail area 
A)  Pet food 
B)  Front office staff salaries 
C)  Grooming supplies 
D)  Depreciation on shelving and equipment used in the grooming and retail area

Past cost information might be too unreliable for future cost estimation because

Consider the following cost data for the cost object, number of machine setups. Each set of costs (A, B, and C) is from a different type of manufacturing operation and represents the cost behavior for the cost of that company's machine setups. Cost A is best described as

The high-low method is a specific application of the two-point method of cost estimation.

The best source for determining historical costs is usually

In a regression equation, fixed costs are represented by the

Reviewing cost behavior patterns over time from the accounting records and using that review to predict future costs best describes

Simple regression minimises the distance from each data point to

Estimating a cost function using past cost data to help determine future costs is useful if

Financial statements usually distinguish between fixed and variable costs.

Which of the following techniques for cost estimation relies on visual analysis?

Liva Company wants to develop a cost function for its maintenance costs to estimate such costs for the coming year. The following data are available:

Liva Company wants to develop a cost function for its maintenance costs to estimate such costs for the coming year. The following data are available: Using the high-low method, what is the variable maintenance cost per direct labor hour?

Which statement is false?

Consider the following cost data for the cost object, number of machine setups. Each set of costs (A, B, and C) is from a different type of manufacturing operation and represents the cost behavior for the cost of that company's machine setups. Cost B is best described as

Simple regression analysis differs from multiple regression analysis based on the number of

When estimating future costs, information quality is higher when

Which of the following cost estimation techniques makes assumptions about the data being analysed? I Analysis at the account level II Two-point method III Regression analysis

In regression analysis, the Adjusted R-square statistic is used to evaluate how well the cost driver explains the behavior in the cost.

The Role of Accounting Information in Management Decision Making

A Costing Framework and Cost Allocation

Cost-Volume-Profit Cvp Analysis

Job Costing Systems

Process Costing Systems

Absorption, Variable and Throughput Costing

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Standard Costs, Flexible Budgets and Variance Analysis

Operational Budgets

Strategy and Control

Planning and Budgeting for Strategic Success

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters

Exam 2: Cost Concepts, Behaviour and Estimation

Past cost information might be too unreliable for future cost estimation because

Consider the following cost data for the cost object, number of machine setups. Each set of costs (A, B, and C) is from a different type of manufacturing operation and represents the cost behavior for the cost of that company's machine setups. Cost A is best described as

The high-low method is a specific application of the two-point method of cost estimation.

The best source for determining historical costs is usually

In a regression equation, fixed costs are represented by the

Reviewing cost behavior patterns over time from the accounting records and using that review to predict future costs best describes

Simple regression minimises the distance from each data point to

Estimating a cost function using past cost data to help determine future costs is useful if

Financial statements usually distinguish between fixed and variable costs.

Which of the following techniques for cost estimation relies on visual analysis?

Liva Company wants to develop a cost function for its maintenance costs to estimate such costs for the coming year. The following data are available:

Liva Company wants to develop a cost function for its maintenance costs to estimate such costs for the coming year. The following data are available: Using the high-low method, what is the variable maintenance cost per direct labor hour?

Which statement is false?

Consider the following cost data for the cost object, number of machine setups. Each set of costs (A, B, and C) is from a different type of manufacturing operation and represents the cost behavior for the cost of that company's machine setups. Cost B is best described as

Simple regression analysis differs from multiple regression analysis based on the number of

When estimating future costs, information quality is higher when

Which of the following cost estimation techniques makes assumptions about the data being analysed? I Analysis at the account level II Two-point method III Regression analysis

In regression analysis, the Adjusted R-square statistic is used to evaluate how well the cost driver explains the behavior in the cost.

The Role of Accounting Information in Management Decision Making

A Costing Framework and Cost Allocation

Cost-Volume-Profit Cvp Analysis

Job Costing Systems

Process Costing Systems

Absorption, Variable and Throughput Costing

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Standard Costs, Flexible Budgets and Variance Analysis

Operational Budgets

Strategy and Control

Planning and Budgeting for Strategic Success

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters