Exam 3: Measurement of Cost Behavior

In a linear cost function,the fixed cost is ________.

The high-low method can be used to approximate a cost function.A disadvantage of this method is ________.

When estimating the cost of the laundry department in a hospital,which of the following cost drivers should be used?

When managers graph a linear cost function with one cost driver,the intercept represents the ________ cost and the slope represents the ________ cost.

A mixed-cost function is graphed as a ________.

Using activity analysis,Arnoldson Company has identified the appropriate cost driver for maintenance costs in a factory as the number of machine hours.The maintenance costs have been observed as follows within the relevant range of 5,000 to 8,000 machine-hours. Month Maintenance Cost Machine Hours January \ 7,900 5,600 February \ 8,500 7,100 March \ 7,400 5,000 April \ 8,200 6,500 May \ 9,100 7,300 Iune \ 9,800 8,000 July \ 7,800 6,200 Required: 1.Estimate the cost function using the high-low method. 2.If you were going to use the visual-fit method to estimate the cost function,what steps will you take?

In engineering analysis,cost analysts estimate cost functions using ________.

The following data has been assembled for Robert Company.Use the high-low method. Month Cost Hours: January \ 24,400 2,000 February \ 39,000 2,200 March \ 35,280 2,750 April \ 36,400 3,500 May \ 40,000 4,000 The cost function is ________ where Y = Total cost and X = Number of hours.

An engineering analysis is often not timely in measuring the cost function.

When using the visual-fit method to estimate a cost function,we can estimate the fixed cost by ________.

The least-squares regression method can be used to approximate a cost function.A disadvantage of this method is ________.

When estimating the total cost of a one-way flight from New York to Los Angeles,what cost driver should be used?

Volume-driven costs can be easily traced to products or services.

The first step in regression analysis is to plot the cost data against each potential cost driver because the plots may show ________.

To estimate the monthly maintenance cost for the maintenance department in a hospital,the following monthly costs are available: Monthly Expense Costs Supervisor Salary Expense \ 3,000 Depreciation Expense-Maintenance Equipment \ 5,000 Repairs Expense-Maintenance Equipment \ 5,000 Supplies Expense \ 7,000 Wages Expense-Maintenance Workers \ 10,000 The Supervisor Salary Expense and the Depreciation Expense are fixed costs.The remaining expenses are variable costs.There are 1,000 patient days in a month,which is the cost driver for maintenance costs.Estimate the cost function where Y is the monthly maintenance cost and X is the variable cost per patient day.

When estimating cost functions,engineering analysis based on observations of employee behavior has the following disadvantage: ________.