Exam 10: Determining How Costs Behave

Which of the following statements shows a difference between simple regression and multiple regression?

Simple regression analysis estimates the relationship between the dependent variable and one independent variable.

The learning-curve models presented in the text examine ________.

Misinterpretation of data can arise when fixed costs are reported on a per unit basis.

Which cost estimation method would involve analyzing direct labor subsidiary accounts and classifying costs as as variable,fixed,or mixed to derive cost estimation formulas?

When estimating a cost function,cost behavior can be approximated by a linear cost function within the relevant range.

Variable cost per labor-hour is $0.82 Fixed cost is $18,500.Machine hours during the period are 90.Calculate the total cost for 360 labor hours.

Which of the following is an example of nonlinear cost function?

Explain the difference between the cumulative average-time learning model and the incremental unit-time learning model.

At the Spring Valley Company Company,the cost of the personnel department has always been charged to production departments based upon number of employees.Recently,opinions gathered from the department managers indicate that the number of new hires might be a better predictor of personnel costs. If the number of new hires is considered the cost driver,what amount of personnel costs will be allocated to Department A? (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar. )

Regression analysis is a statistical method that measures the average amount of change in the dependent variable associated with a unit change in one or more independent variables.

In the cumulative average-time learning model,cumulative average time per unit declines by a constant percentage each time the cumulative quantity of units produced doubles.

Two common forms of quantitative analysis methods of cost estimation are the high-low method and regression analysis.

Which of the following is an example of time-series data:

The cost function y = 13,000 + 9X ________.

M & G TV and Appliance Store is a small company that has hired you to perform some management advisory services.The following information pertains to 2017 operations. What are the estimated total costs if the company expects to sell 3,300 units next year?

For Heavy Manufacturing Company,labor-hours are 40,000 and wages $184,000 at the high point of the relevant range,and labor-hours are 24,000 and wages $120,000 at the low point of the relevant range. What is the constant?

Quantum Company uses the high-low method to estimate the cost function.The information for 2017 is provided below: What is the slope coefficient?

Salter Manufacturing Company produces inventory in a highly automated assembly plant in Fall River,Massachusetts.The automated system is in its first year of operation and management is still unsure of the best way to estimate the overhead costs of operations for budgetary purposes.For the first six months of operations,the following data were collected: Machine-hours Kilowatt-hours Total Overhead Costs January 4,560 5,424,000 \ 405,600 February 4,380 5,208,000 404,160 March 4,680 5,400,000 407,040 April 3,960 5,148,000 404,160 May 3,900 5,040,000 391,200 June 3,720 4,944,000 384,000 Required: a.Use the high-low method to determine the estimating cost function with machine-hours as the cost driver. b.Use the high-low method to determine the estimating cost function with kilowatt-hours as the cost driver. c.For July,the company ran the machines for 4,000 hours and used 4,550,000 kilowatt-hours of power.The overhead costs totaled $365,000.Which cost driver was the best predictor for July?

A plot of data that results in one extreme observation most likely indicates that ________.