Question 1

Multicollinearity exists when which of the following conditions is present?

Accepted Answer

A) At least two variables change due to changes in the cost driver. 
B) There are at least two cost pools (usually separated for fixed and variable costs). 
C) The underlying value of the coefficient can only be explained in relation to dependent variables. 
D) There are two or more statistically significant observations of at least two independent variables. 
E) Two or more independent variables are highly correlated with each other. 
A) At least two variables change due to changes in the cost driver. 
B) There are at least two cost pools (usually separated for fixed and variable costs). 
C) The underlying value of the coefficient can only be explained in relation to dependent variables. 
D) There are two or more statistically significant observations of at least two independent variables. 
E) Two or more independent variables are highly correlated with each other.

Question 2

Use the information below to answer the following question(s).
Presented below is the production data for the last six months of the year for the mixed costs incurred by Wagner Company.
  
-Using the high-low method,the cost function would be stated as

Accepted Answer

A) y = $2,200 + $2.80x. 
B) y = $17,816 + $0.36x. 
C) y = $536 + $3.06x. 
D) y = $24,450 + $0.33x. 
E) y = $39,250 + $0.33x. 
A) y = $2,200 + $2.80x. 
B) y = $17,816 + $0.36x. 
C) y = $536 + $3.06x. 
D) y = $24,450 + $0.33x. 
E) y = $39,250 + $0.33x.

Question 3

The demand for Ballard's Glass Company's products varies,ranging from 10 to 20 windows a day with an average of 15.John Ballard is the only worker and he works a maximum of eight hours a day,five days a week.Each order is one window,and each window takes 26 minutes to install.What is the average waiting time in minutes?

Accepted Answer

A) 1.6 
B) 4.4 
C) 28.2 
D) 56.33 
E) 82.3 
A) 1.6 
B) 4.4 
C) 28.2 
D) 56.33 
E) 82.3

Question 4

A cause-and-effect relationship,relative to cost drivers and resulting costs,may develop because of physical relationships,contractual relationships,or implicit relationships.

Accepted Answer

A) True 
 B)False

Question 5

Each time Maiertree Care hires a new employee it must wait for some period of time before the employee can meet production standards.Management is unsure of the learning curve in its operations but it knows the first job by a new employee averages 60 hours and the second job averages 48 hours.Assume all jobs to be equal in size.
Required:
a.What is the learning curve percentage,assuming the cumulative average-time method?
b.What is the time for a new employee to build 16 units with this learning curve using the cumulative average-time method? Assume the rate of learning factor is -0.1520.

Accepted Answer

The answer of Each time Maiertree Care hires a new...

Question 6

The selection of the best measure of benefit will depend upon the corresponding change in the cost pool.

Accepted Answer

A) True 
 B)False

Question 7

Simple regression differs from multiple regression in that

Accepted Answer

A) multiple regression uses all available data to estimate the cost function whereas simple regression only uses simple data. 
B) simple regression is limited to the use of only the outcome variables and multiple regression can use both outcome and predictor variables. 
C) simple regression uses only one predictor variable and multiple regression uses more than one predictor variable. 
D) simple regression uses only one outcome variable and multiple regression uses more than one outcome variable. 
E) the lease squares technique cannot be used for simple regression whereas it can be used for multiple regression. 
A) multiple regression uses all available data to estimate the cost function whereas simple regression only uses simple data. 
B) simple regression is limited to the use of only the outcome variables and multiple regression can use both outcome and predictor variables. 
C) simple regression uses only one predictor variable and multiple regression uses more than one predictor variable. 
D) simple regression uses only one outcome variable and multiple regression uses more than one outcome variable. 
E) the lease squares technique cannot be used for simple regression whereas it can be used for multiple regression.

Question 8

Which of the following describes the intercept in a linear cost function?

Accepted Answer

A) the component of fixed costs that,within the relevant range,does not vary with changes in the level of the cost driver 
B) the component of fixed costs that,within the relevant range,does vary with changes in the level of the cost driver 
C) the component of variable costs that,within the relevant range,does not vary with changes in the level of the cost driver 
D) the component of variable costs that,within the relevant range,does vary with changes in the level of the cost driver 
E) the sum of the components of both fixed and variable costs that,within the relevant range,do not vary with changes in the level of the cost driver 
A) the component of fixed costs that,within the relevant range,does not vary with changes in the level of the cost driver 
B) the component of fixed costs that,within the relevant range,does vary with changes in the level of the cost driver 
C) the component of variable costs that,within the relevant range,does not vary with changes in the level of the cost driver 
D) the component of variable costs that,within the relevant range,does vary with changes in the level of the cost driver 
E) the sum of the components of both fixed and variable costs that,within the relevant range,do not vary with changes in the level of the cost driver

Question 9

Use the information below to answer the following question(s).
The Barnett Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable.Barnett Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.
  
-What is the estimated total cost at an operating level of 8,000 hours?

Accepted Answer

A) $39,115 
B) $36,670 
C) $44,711 
D) $43,470 
E) $37,125 
A) $39,115 
B) $36,670 
C) $44,711 
D) $43,470 
E) $37,125

Question 10

The Brick Shirt House is concerned about its declining sales,especially the reduction in the number of customers.For the last two years its shirts have won industry awards for high quality and trend-setting styles.At the latest executive managers' meeting everyone was blaming everyone else for the decline.After much discussion,and the presenting of some fact-finding information,it was determined that sales relationships were the cause of most of the problems.
Required:What may be some of the causes and how can the causes be detected if product quality is not an issue?

Accepted Answer

The causes may be customer satisfaction

Question 11

Arfaei Company manufactures chairs.Because the efforts of manufacturing are approximately equal between labour and machinery,management is considering other possible cost drivers.By considering different cost drivers,it is anticipated that the estimating process can be improved.The following cost estimating equations with their r2 values have been determined for 2016:
   
Required:
a.Which equation should be selected for the analysis?
b.What other factors should be included in the selection of the estimating equation?

Accepted Answer

a.Equation 1 for cutting time is slightl

Question 12

The use of a single independent variable (X)to estimate the dependent variable (y)is known as

Accepted Answer

A) high-low method. 
B) multiple regression. 
C) simple regression. 
D) singular regression. 
E) least squares regression. 
A) high-low method. 
B) multiple regression. 
C) simple regression. 
D) singular regression. 
E) least squares regression.

Question 13

Understanding the drivers of costs is crucially important for managing costs.Provide two causes that create a cause-and-effect relationship between a cost driver and a cost.

Accepted Answer

Any two of:
1.A physical relationship be

Question 14

Cross-sectional data analysis includes

Accepted Answer

A) using a variety of time periods to measure the dependent variable. 
B) using the highest and lowest observation. 
C) analyzing different cost drivers. 
D) comparing information in different cost pools. 
E) observing different entities during the same time period. 
A) using a variety of time periods to measure the dependent variable. 
B) using the highest and lowest observation. 
C) analyzing different cost drivers. 
D) comparing information in different cost pools. 
E) observing different entities during the same time period.

Question 15

List and briefly describe the five steps in estimating a cost function using quantitative analysis.

Accepted Answer

Step 1: Choose the dependent variable.Ch

Question 16

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 was the Penny's TV variable cost per unit sold?

Accepted Answer

A) $18 
B) $235 
C) $339 
D) $200 
E) $218 
A) $18 
B) $235 
C) $339 
D) $200 
E) $218

Question 17

It is appropriate to incorporate expected learning-curve efficiencies when evaluating performance.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements about a high correlation between two variables s and t is FALSE?

Accepted Answer

A) s may cause t. 
B) t may cause s. 
C) They both may be affected by a third variable. 
D) The correlation establishes an economically plausible relationship between costs and their cost drivers. 
E) The correlation may be due to random chance. 
A) s may cause t. 
B) t may cause s. 
C) They both may be affected by a third variable. 
D) The correlation establishes an economically plausible relationship between costs and their cost drivers. 
E) The correlation may be due to random chance.

Question 19

Vestor Ltd.has estimated a 90% cumulative average-time learning curve applies to labour time to manufacture its new product.The first unit took 18 hours.If Vestor's estimates are correct,how many hours will be used to manufacture 4 total units?

Accepted Answer

A) 14.58 hours 
B) 64.80 hours 
C) 72.00 hours 
D) 64.01 hours 
E) 58.32 hours 
A) 14.58 hours 
B) 64.80 hours 
C) 72.00 hours 
D) 64.01 hours 
E) 58.32 hours

Question 20

Carl Clarkson and Lenny Lenid have been assigned to review the costs of quality at the Sprotton Chemicals Ltd.for the month of September.All amounts are in thousands (000's).
   
Some information from a competitor,Sheltonville Industries,has been leaked.You learn that Sheltonville's costs of quality (as a percentage of total costs of quality)is 15% on external failure,20% on internal failure,35% on appraisal and the rest on prevention.
Required:
a.Prepare a cost of quality report for September for the Sprotton Chemicals including calculations of each cost category as a percentage of total costs of quality.
b.Compare Sprotton's approach to quality management to Sheltonville's.Comment on your findings.(What are the implications of the differences?)

Accepted Answer

a.
 @#IMG-DLM& 
b.
There is a distinct difference

Multicollinearity exists when which of the following conditions is present?

Use the information below to answer the following question(s). Presented below is the production data for the last six months of the year for the mixed costs incurred by Wagner Company. -Using the high-low method,the cost function would be stated as

A cause-and-effect relationship,relative to cost drivers and resulting costs,may develop because of physical relationships,contractual relationships,or implicit relationships.

The selection of the best measure of benefit will depend upon the corresponding change in the cost pool.

Simple regression differs from multiple regression in that

Which of the following describes the intercept in a linear cost function?

The use of a single independent variable (X)to estimate the dependent variable (y)is known as

Understanding the drivers of costs is crucially important for managing costs.Provide two causes that create a cause-and-effect relationship between a cost driver and a cost.

Cross-sectional data analysis includes

List and briefly describe the five steps in estimating a cost function using quantitative analysis.

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 was the Penny's TV variable cost per unit sold?

It is appropriate to incorporate expected learning-curve efficiencies when evaluating performance.

Which of the following statements about a high correlation between two variables s and t is FALSE?

Vestor Ltd.has estimated a 90% cumulative average-time learning curve applies to labour time to manufacture its new product.The first unit took 18 hours.If Vestor's estimates are correct,how many hours will be used to manufacture 4 total units?

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 10: Analysis of Cost Behaviour

Multicollinearity exists when which of the following conditions is present?

Use the information below to answer the following question(s). Presented below is the production data for the last six months of the year for the mixed costs incurred by Wagner Company. -Using the high-low method,the cost function would be stated as

A cause-and-effect relationship,relative to cost drivers and resulting costs,may develop because of physical relationships,contractual relationships,or implicit relationships.

The selection of the best measure of benefit will depend upon the corresponding change in the cost pool.

Simple regression differs from multiple regression in that

Which of the following describes the intercept in a linear cost function?

The use of a single independent variable (X)to estimate the dependent variable (y)is known as

Understanding the drivers of costs is crucially important for managing costs.Provide two causes that create a cause-and-effect relationship between a cost driver and a cost.

Cross-sectional data analysis includes

List and briefly describe the five steps in estimating a cost function using quantitative analysis.

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 was the Penny's TV variable cost per unit sold?

It is appropriate to incorporate expected learning-curve efficiencies when evaluating performance.

Which of the following statements about a high correlation between two variables s and t is FALSE?

Vestor Ltd.has estimated a 90% cumulative average-time learning curve applies to labour time to manufacture its new product.The first unit took 18 hours.If Vestor's estimates are correct,how many hours will be used to manufacture 4 total units?

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters