Exam 3: Cost Behavior

__________ are those acquired from outside sources where the terms of acquisition do not require any long-term commitments.

Machine hours and electricity costs for Lindbergh Industries for the year 2014 are as follows: Required:

In a traditional cost management system, cost behavior is assumed to be driven only by

The linearity assumption is most likely to be a close approximation for an underlying nonlinear cost function

Alamo, Inc., is beginning the production of a new product. Management believes that 500 labor hours will be required to complete the new unit. An 80 percent incremental unit-time learning curve model for direct labor hours is assumed to be valid. Assume the q = -0.3219. Data on costs are as follows: Required:

The Ladder Company wants to develop a cost estimating equation for its monthly cost of electricity. It has the following data: Using the high-low method, which of the following is the best equation?

Which of the following is an example of a discretionary fixed expense?

Managerial judgement includes the possibility of mixed costs.

In the formula Y = F + VX, VX refers to the

A number of cost behavior patterns do not follow a linear pattern, instead, they follow a nonlinear cost curve called the learning curve.

Managers agree that the ideas behind the learning curve can extend to the service industry only.

__________ explain changes in costs as units produced change.

In the formula Y = F + VX, X refers to the

Wonder Company is planning to introduce a new product with an 80 percent incremental unit-time learning curve 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. What is the cumulative total time (labor hours) to produce 2,000 units?

Assume the following information: What is the variable cost per unit?

Whenever least squares is used to fit an equation involving two or more independent variables, the method is called multiple regression.

The direct material cost is $20,000 when 2,000 units are produced. What is the direct material cost for 2,500 units produced?

Figure 3-8 The following computer printout estimated overhead costs using multiple regression: During the year the company used 1,000 setup hours and 500 parts. Refer to Figure 3-8. Which slope and intercept parameters are significant at the 0.05 level?

The coefficient of determination is

What is the difference between a correlation equal to -1 and a correlation equal to +1?