Question 1

The hypothesis test of cost parameters indicates whether the parameters are different from __________ .

Accepted Answer

The answer of The hypothesis test of cost parameters indicates...

Question 2

When Multiple regression is used, the user has a choice of using manual computation or using regression programs.

Accepted Answer

A) True 
 B)False

Question 3

Given the following graphs, which graph represents fixed costs?

Accepted Answer

A)  I 
B)  II 
C)  III 
D)  none of these 
A)  I 
B)  II 
C)  III 
D)  none of these

Question 4

The efficient level of activity performance is called

Accepted Answer

A)  practical capacity. 
B)  activity capacity. 
C)  unused capacity. 
D)  acquired capacity. 
A)  practical capacity. 
B)  activity capacity. 
C)  unused capacity. 
D)  acquired capacity.

Question 5

Figure 3-9 Hereford Company is planning to introduce a new product with an 80 percent learning rate for production for batches of 1,000 units. The variable labor costs are $30 per unit for the first 1,000-unit batch. Each batch requires 100 hours. There are $10,000 in fixed costs not subject to learning.
Refer to Figure 3-9. What is the cumulative average time per batch using the incremental unit-time learning curve for 2,000 units?

Accepted Answer

A)  180 
B)  100 
C)  90 
D)  80 
A)  180 
B)  100 
C)  90 
D)  80

Question 6

A nursing home requires one nurse for each six patients. This is an example of a

Accepted Answer

A)  fixed cost. 
B)  variable cost. 
C)  step cost. 
D)  mixed cost. 
A)  fixed cost. 
B)  variable cost. 
C)  step cost. 
D)  mixed cost.

Question 7

Which of the following statements is TRUE about relevant range?

Accepted Answer

A)  When costs reach a level above the relevant range, they are considered appropriate for analysis. 
B)  Linear estimates of an economist's curvilinear cost function is only valid within the relevant range. 
C)  When costs reach a level below the relevant range, they are considered appropriate for analysis. 
D)  The nonlinear relevant range is ignored, and only those costs outside of this range may be considered. 
A)  When costs reach a level above the relevant range, they are considered appropriate for analysis. 
B)  Linear estimates of an economist's curvilinear cost function is only valid within the relevant range. 
C)  When costs reach a level below the relevant range, they are considered appropriate for analysis. 
D)  The nonlinear relevant range is ignored, and only those costs outside of this range may be considered.

Question 8

The percentage of variability in the dependent variable explained by an independent variable (i.e. measure of activity output) is called the coefficient of correlation.

Accepted Answer

A) True 
 B)False

Question 9

Costs that follow a step-cost behavior are defined as __________ costs.
or

Accepted Answer

step-fixed

Question 10

Committed resources

Accepted Answer

A)  are supplied as needed. 
B)  are acquired by a contract for the exact amount of their usage. 
C)  may exceed the demand for their usage. 
D)  all of the above. 
A)  are supplied as needed. 
B)  are acquired by a contract for the exact amount of their usage. 
C)  may exceed the demand for their usage. 
D)  all of the above.

Question 11

What does a correlation coefficient near +1 mean?

Accepted Answer

A)  Two variables are moving in the opposite direction. 
B)  Two variables are moving in the same direction. 
C)  Two variables are unrelated. 
D)  One variable is not a good predictor of the other. 
A)  Two variables are moving in the opposite direction. 
B)  Two variables are moving in the same direction. 
C)  Two variables are unrelated. 
D)  One variable is not a good predictor of the other.

Question 12

If all the activity capacity acquired is not used, this is an example of

Accepted Answer

A)  practical capacity. 
B)  activity capacity. 
C)  unused capacity. 
D)  ideal capacity. 
A)  practical capacity. 
B)  activity capacity. 
C)  unused capacity. 
D)  ideal capacity.

Question 13

Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that is parallel to the horizontal axis?

Accepted Answer

A)  total direct material costs 
B)  a consultant paid $75 per hour with a maximum fee of $1,200 
C)  employees who are paid $10 per hour and guaranteed a minimum weekly wage of $200 
D)  rent on exhibit space at a convention 
A)  total direct material costs 
B)  a consultant paid $75 per hour with a maximum fee of $1,200 
C)  employees who are paid $10 per hour and guaranteed a minimum weekly wage of $200 
D)  rent on exhibit space at a convention

Question 14

Figure 3-1 Sonor Systems undertakes its own machine maintenance. The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour. Last year 275,000 machine hours were used to produce 100,000 units.
See Figure 3-1. If 300,000 machine hours had been worked last year, what would be the total machine maintenance cost?

Accepted Answer

A)  $600,000 
B)  $620,000 
C)  $420,000 
D)  $220,000 
A)  $600,000 
B)  $620,000 
C)  $420,000 
D)  $220,000

Question 15

Figure 3-3 The Sandoval Company has four process engineers that are each able to process 1,500 design changes. Last year 5,250 design changes were produced by the four engineers. Each engineer is paid $60,000 per year.
Refer to Figure 3-3. Calculate the unused capacity.

Accepted Answer

A)  750 change orders 
B)  1,375 change orders 
C)  4,000 change orders 
D)  2,000 change orders 
A)  750 change orders 
B)  1,375 change orders 
C)  4,000 change orders 
D)  2,000 change orders

Question 16

Resources, such as direct materials, direct labor, electricity, equipment, and so on, are economic elements that enable one to perform activities.

Accepted Answer

A) True 
 B)False

Question 17

The method for analyzing cost behavior that generally classifies general ledger accounts is

Accepted Answer

A)  account analysis method. 
B)  multiple regression method. 
C)  industrial engineering method. 
D)  learning curve method. 
A)  account analysis method. 
B)  multiple regression method. 
C)  industrial engineering method. 
D)  learning curve method.

Question 18

Which of the following is an advantage of using the scatterplot method over the high-low method to estimate costs?

Accepted Answer

A)  It is a statistical method to determine the "best fit." 
B)  A cost analyst can review the data visually and eliminate outliers. 
C)  The quality of the cost formula relies on the objective judgment of the analyst. 
D)  The cost formula can be determined simply by looking at two points of data. 
A)  It is a statistical method to determine the "best fit." 
B)  A cost analyst can review the data visually and eliminate outliers. 
C)  The quality of the cost formula relies on the objective judgment of the analyst. 
D)  The cost formula can be determined simply by looking at two points of data.

Question 19

As the volume of activity increases within the relevant range, the variable cost per unit

Accepted Answer

A)  decreases. 
B)  decreases at first, then increases. 
C)  remains the same. 
D)  increases. 
A)  decreases. 
B)  decreases at first, then increases. 
C)  remains the same. 
D)  increases.

Question 20

Cumulative average-time __________ curve assumes the cumulative average time per unit decreases by a constant percentage each time the cumulative quantity of units produced doubles.

Accepted Answer

The answer of Cumulative average-time __________ curve assumes the cumulative...

The hypothesis test of cost parameters indicates whether the parameters are different from __________ .

When Multiple regression is used, the user has a choice of using manual computation or using regression programs.

Given the following graphs, which graph represents fixed costs?

The efficient level of activity performance is called

A nursing home requires one nurse for each six patients. This is an example of a

Which of the following statements is TRUE about relevant range?

The percentage of variability in the dependent variable explained by an independent variable (i.e. measure of activity output) is called the coefficient of correlation.

Costs that follow a step-cost behavior are defined as __________ costs. or

Committed resources

What does a correlation coefficient near +1 mean?

If all the activity capacity acquired is not used, this is an example of

Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that is parallel to the horizontal axis?

Figure 3-3 The Sandoval Company has four process engineers that are each able to process 1,500 design changes. Last year 5,250 design changes were produced by the four engineers. Each engineer is paid $60,000 per year. Refer to Figure 3-3. Calculate the unused capacity.

Resources, such as direct materials, direct labor, electricity, equipment, and so on, are economic elements that enable one to perform activities.

The method for analyzing cost behavior that generally classifies general ledger accounts is

Which of the following is an advantage of using the scatterplot method over the high-low method to estimate costs?

As the volume of activity increases within the relevant range, the variable cost per unit

Cumulative average-time __________ curve assumes the cumulative average time per unit decreases by a constant percentage each time the cumulative quantity of units produced doubles.

Introduction to Cost Management

Basic Cost Management Concepts

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 3: Cost Behavior

The hypothesis test of cost parameters indicates whether the parameters are different from __________ .

When Multiple regression is used, the user has a choice of using manual computation or using regression programs.

Given the following graphs, which graph represents fixed costs?

The efficient level of activity performance is called

A nursing home requires one nurse for each six patients. This is an example of a

Which of the following statements is TRUE about relevant range?

The percentage of variability in the dependent variable explained by an independent variable (i.e. measure of activity output) is called the coefficient of correlation.

Costs that follow a step-cost behavior are defined as __________ costs. or

Committed resources

What does a correlation coefficient near +1 mean?

If all the activity capacity acquired is not used, this is an example of

Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that is parallel to the horizontal axis?

Figure 3-3 The Sandoval Company has four process engineers that are each able to process 1,500 design changes. Last year 5,250 design changes were produced by the four engineers. Each engineer is paid $60,000 per year. Refer to Figure 3-3. Calculate the unused capacity.

Resources, such as direct materials, direct labor, electricity, equipment, and so on, are economic elements that enable one to perform activities.

The method for analyzing cost behavior that generally classifies general ledger accounts is

Which of the following is an advantage of using the scatterplot method over the high-low method to estimate costs?

As the volume of activity increases within the relevant range, the variable cost per unit

Cumulative average-time __________ curve assumes the cumulative average time per unit decreases by a constant percentage each time the cumulative quantity of units produced doubles.

Introduction to Cost Management

Basic Cost Management Concepts

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters