Exam 10: Determining How Costs Behave

In using high-low method,the slope coefficient is calculated by dividing the difference between highest and lowest observations of the cost driver by the difference between costs associated with highest and lowest observations of the cost driver.

The standard error of the estimated coefficient indicates how much the estimated value,b,is likely to be affected by random factors.

As a result of learning curve,________.

The conference method estimates cost functions ________.

The incremental unit-time learning model with a 80% learning curve indicates that if it takes 150 minutes to manufacture the first unit of a new model,then the second unit will take only 120 minutes to manufacture.

It can be inferred that when there is a high correlation between two variables,one is the cause of the other.

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

The White Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable.White Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation. How is the cost function stated?

The trend in large corporations is a movement away from quantitative analysis of cost drivers to the conference method.

To complete the first setup on a new machine took an employee 320 minutes.Using an 70% cumulative average-time learning curve indicates that the second setup on the new machine is expected to take ________.

A major concern that arises with multiple regression is multicollinearity,which exists when ________.

Quantitative analysis methods estimate cost functions ________.

The White Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable.White 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 3,400 hours?

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

Which of the following is a learning-curve model?

With a step fixed-cost function ________.

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

Which of the following is a step followed by an analyst to overcome problems related to data collection for estimating cost function?

Goodness of fit has meaning only if the relationship between the cost drivers and costs is economically plausible.

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 were total fixed costs for 2017?