Exam 3: Cost Behavior

Which of the following statements is NOT true?

The hypothesis test of cost parameters

Figure 3-6 The Stanford Company incurred the following maintenance cost during a five month period: Refer to Figure 3-6. Using a computer or calculator, compute the estimate of variable cost per unit of production using the method of least squares. Rounded to two decimal places, this value would be

An alternative measure of goodness of fit is the coefficient of determination.

Costs in marketing, distribution, and service after the sale __________ as number of units produced and sold __________ .

The three widely used quantitative methods of separating a mixed cost into its fixed and variable components are the high-low method, the scatter plot method, and the method of least squares.

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. Develop a cost equation for the total machine maintenance cost.

A coefficient of determination of 0.91 means

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 activity rate per change order.

The method of least squares requires a __________ in order to be utilized.

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 total time (labor hours) to produce 2,000 units based on the cumulative average-time learning curve?

When a firm acquires the resources needed to perform an activity, it is obtaining

A $4,000 per month salary paid to a supervisor is an example of a:

The Y in the equation Y = F + VX represents the __________, the dependent variable

What does a correlation coefficient near -1 mean?

Which of the following is an example of a step-fixed cost?

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 starts at the origin and reaches a maximum value beyond which the line is parallel to the horizontal axis?

The level of activity performance where the amount of activity capacity needed corresponds to the level of efficiency required is called the activity capacity.

The type of resources that are acquired from outside sources, where the terms of acquisition do NOT require any long-term commitment for any given amount of the resource are called:

The __________ analysis method is a method of determining cost behavior.