Answer the following questions using the information below: Stosur Courtside Caterers is a small company that has hired you to perform some management advisory services.The following information pertains to 2018 operations. \[\begin{array} { l r } \text { Sales (5000 microwave ovens) } & \$ 1350000 \\ \text { Cost of goods sold } & 540000 \\ \text { Store manager's salary per year } & 75000 \\ \text { Operating costs per year } & 225000 \\ \text { Advertising and promotion per year } & 25000 \\ \text { Commissions (4\% of sales) } & 67500 \end{array}\] -Which cost estimation method is being used by Stosur Courtside Caterers?

A) The quantitative analysis method B) The industrial engineering method C) The conference method D) The account analysis method A) The quantitative analysis method B) The industrial engineering method C) The conference method D) The account analysis method

Answer the following questions using the information below: The Tamworth Company uses the high-low method to estimate the cost function.The information for 2018 is provided below: \[\begin{array} { l c c } & \text { Machine-hours } & \text { Labour Costs } \\ \text { Highest observation of cost driver } & 800 & \$ 20000 \\ \text { Lowest observation of cost driver } & 480 & \$ 13600 \end{array}\] -What is the constant for the estimating cost equation?

A) $4000 B) $13 600 C) $16 000 D) $20 000 A) $4000 B) $13 600 C) $16 000 D) $20 000

Answer the following questions using the information below: Hewitt Sporting Goods Store is a small company that has hired you to perform some management advisory services.The following information pertains to 2018 operations. $\begin{array}{lr} \text { Sales (2000 cricket bats) } & \$ 900000 \\ \text { Cost of goods sold } & 400000 \\ \text { Store manager's salary per year } & 70000 \\ \text { Operating costs per year } & 157000 \\ \text { Advertising and promotion per year } & 15000 \\ \text { Commissions ( } 4 \% \text { of sales) } & 36000 \end{array}$ -What was the variable cost per unit sold for 2018?

A) $18 B) $218 C) $200 D) $339 A) $18 B) $218 C) $200 D) $339

Exam 3: Determining How Costs Behave

Answer the following questions using the information below: Stosur Courtside Caterers is a small company that has hired you to perform some management advisory services.The following information pertains to 2018 operations. Sales (5000 microwave ovens) \ 1350000 Cost of goods sold 540000 Store manager's salary per year 75000 Operating costs per year 225000 Advertising and promotion per year 25000 Commissions (4\% of sales) 67500 -Which cost estimation method is being used by Stosur Courtside Caterers?

(Multiple Choice)

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Question 61

Knowing the proper relevant range is essential to properly classify costs.

(True/False)

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Question 62

When using an activity-based costing system,a batch-level cost must have a batch-level cost driver.

(True/False)

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Question 63

A high correlation between two variables s and t indicates that:

(Multiple Choice)

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Question 64

Answer the following questions using the information below: The Tamworth Company uses the high-low method to estimate the cost function.The information for 2018 is provided below: Machine-hours Labour Costs Highest observation of cost driver 800 \ 20000 Lowest observation of cost driver 480 \ 13600 -What is the constant for the estimating cost equation?

(Multiple Choice)

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Question 65

Answer the following questions using the information below: Hewitt Sporting Goods Store is a small company that has hired you to perform some management advisory services.The following information pertains to 2018 operations. Sales (2000 cricket bats) \ 900000 Cost of goods sold 400000 Store manager's salary per year 70000 Operating costs per year 157000 Advertising and promotion per year 15000 Commissions ( 4\% of sales) 36000 -What was the variable cost per unit sold for 2018?

(Multiple Choice)

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Question 66

The longer the time horizon,the more likely that a cost will have a fixed cost behaviour.

(True/False)

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Question 67

Multicollinearity exists in multiple regressions when two or more independent variables are highly correlated with each other.

(True/False)

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Question 68

Whyalla Storage ran its freezer in July,a slow month,for 500 hours for a total cost of $80 000.In February,a peak month,the freezer ran for 720 hours for a total cost of $114 000. Required: a.What is the cost estimating equation for the department if hours of freezer use are used as the cost driver? b.What is the estimated total cost at an operating level of 600 hours? _ _

(Essay)

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Question 69

The 'industrial engineering method' uses a formal mathematical method to identify cause-and-effect relationships among past data observations.

(True/False)

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Question 70

All of the following are cost analysis problems EXCEPT:

(Multiple Choice)

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Question 71

The industrial engineering method of cost estimation is based on opinions from various departments and is quick and of low cost to apply.

(True/False)

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Question 72

A learning curve is a function that measures how labour-hours per unit decrease,as units of production increase.

(True/False)

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Question 73

Choosing an economically plausible cost driver for indirect costs is fairly simple and knowledge of operations is generally unnecessary.

(True/False)

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Question 74

Answer the following questions using the information below: The Nowra Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable.Nowra Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation. Month Cost Hours January \ 40000 3500 February 24400 2000 March 31280 2450 April 36400 3000 May 44160 3900 June 42400 3740 -How is the cost function stated?

(Multiple Choice)

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Question 75

The y-intercept of a linear cost function is an accurate cost assessment of using zero machine-hours,even if zero machine-hours is outside of the relevant range.

(True/False)

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Question 76

One assumption frequently made in cost behaviour estimation is that changes in total costs can be explained by changes in the level of a single activity.

(True/False)

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Question 77

Goodness-of-fit measures how well the predicted values in a cost estimating equation:

(Multiple Choice)

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Question 78

A flat or slightly sloped regression line indicates a strong relationship.

(True/False)

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Question 79

A plot of data that results in one extreme observation MOST likely indicates that:

(Multiple Choice)

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Question 80

Knowing the proper relevant range is essential to properly classify costs.

When using an activity-based costing system,a batch-level cost must have a batch-level cost driver.

A high correlation between two variables s and t indicates that:

The longer the time horizon,the more likely that a cost will have a fixed cost behaviour.

Multicollinearity exists in multiple regressions when two or more independent variables are highly correlated with each other.

The 'industrial engineering method' uses a formal mathematical method to identify cause-and-effect relationships among past data observations.

All of the following are cost analysis problems EXCEPT:

The industrial engineering method of cost estimation is based on opinions from various departments and is quick and of low cost to apply.

A learning curve is a function that measures how labour-hours per unit decrease,as units of production increase.

Choosing an economically plausible cost driver for indirect costs is fairly simple and knowledge of operations is generally unnecessary.

The y-intercept of a linear cost function is an accurate cost assessment of using zero machine-hours,even if zero machine-hours is outside of the relevant range.

One assumption frequently made in cost behaviour estimation is that changes in total costs can be explained by changes in the level of a single activity.

Goodness-of-fit measures how well the predicted values in a cost estimating equation:

A flat or slightly sloped regression line indicates a strong relationship.

A plot of data that results in one extreme observation MOST likely indicates that:

Management Accounting in Context

Different Costs for Different Purposes

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

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