Exam 10: Analysis of Cost Behaviour

Answer the following question(s)using the information below: At the Todd Company,the cost of the personnel department has always been charged to the various departments based upon the number of employees.Recently,opinions gathered from the department managers indicated that the number of new hires might also be a predictor of personnel costs to be assigned.Total personnel costs are $320,000. -If the number of new hires is considered the cost driver,what amount of personnel costs will be allocated to Department A?

The ideal database for estimating cost functions quantitatively includes values for the independent variable over a wide range.

A corporation can measure its quality performance by using financial or nonfinancial measures of quality.Discuss the merits of each method and whether the use of one precludes the use of the other.

Which cost estimation method typically uses qualitative analysis rather than quantitative analysis?

Supplier evaluations are an example of

A step cost function is an example of a linear function.

Time-series data analysis includes

Stow-a-way Luggage Ltd.manufactures luggage for the traveler concerned about excessive airline luggage fees.They have two designs of carry-on luggage.The "Exec" is targeted to business travelers and the "Companion" for those on a holiday.The company used simple regression to budget indirect costs of $823,400 based on the following equation: y = $542,400 + $5.62X,where X is 50,000 direct labour hours for a budgeted production of 250,000 units.At the end of the year the company's controller evaluated the actual costs for producing 220,000 units.Using simple regression that actual indirect cost of $810,825;represented by the following equation y = $535,400 + $5.75X for the 47,900 actual direct labour hours. Required: a.Determine the rate,efficiency/production-volume variances for the indirect costs. b.What statistical measure of serial correlation could the controller use to determine if the independence of the residuals is within an acceptable range?

Use the information below to answer the following question(s). At the high point of the relevant range,labour hours at Bradco Restoration were 10,000 and wages were $22,500.At the low point of the relevant range,labour hours were 7,500 and wages were $17,500. -Using the high-low method determine the slope coefficient per labour hour at Bradco Restoration?

Andrew Pallet Co. ,Inc.manufactures pallets for various manufacturing companies.Each new employee takes 10 hours to make the first pallet and 8 hours to make the second.The manufacturing overhead charge per hour is $80. Required: a.What is the learning curve percentage assuming the cumulative average method? b.What is the time needed to build 8 pallets by a new employee using the cumulative average-time method? Assume the rate of learning factor is -0.1520. c.What is the time needed to produce the 16th pallet by a new employee using the incremental unit-time method? Assume the rate of learning factor is -0.3219.

The demand for Ballard's Glass Company's products varies.Each order is one window,and each window takes 26 minutes to install.Assuming wait time is 12 minutes,and order receipt time equals 21 minutes what is the cycle time for an order on average?

Answer the following question(s)using the information below. Penny's TV and Appliance Store is a small company that has the following information pertaining to current year operations. -What were total fixed costs at Penny's TV for the current year?