Question 1

Select the appropriate type of cost for each of the definitions listed below.
-Total cost = fixed cost + variable cost

Accepted Answer

A) Variable 
B) Fixed 
C) Mixed 
D) Step 
A) Variable 
B) Fixed 
C) Mixed 
D) Step

Question 2

Select the appropriate item for each of the definitions listed below.
-Y-intercept corresponds to the fixed cost

Accepted Answer

A) Committed fixed cost 
B) Discretionary fixed cost 
C) Mixed cost 
D) Step cost 
A) Committed fixed cost 
B) Discretionary fixed cost 
C) Mixed cost 
D) Step cost

Question 3

Select the best description for the following:

-6.53

Accepted Answer

A) Variable rate 
B) Fixed cost 
C) Variable cost 
D) Cost equation 
E) Coefficient of determination
F)Significance F 
A) Variable rate 
B) Fixed cost 
C) Variable cost 
D) Cost equation 
E) Coefficient of determination
F)Significance F

Question 4

Which is a characteristic of the scattergraph method?

Accepted Answer

A) is the most accurate method 
B) has the advantage of objectivity 
C) may reveal the presence of outliers 
D) uses two data points 
A) is the most accurate method 
B) has the advantage of objectivity 
C) may reveal the presence of outliers 
D) uses two data points

Question 5

Using a linear regression program,the term intercept refers to the fixed cost.

Accepted Answer

A) True 
 B)False

Question 6

What is the relationship between total variable costs and output?

Accepted Answer

A) Total variable costs stay the same as output changes. 
B) Total variable costs increase as output decreases. 
C) Total variable costs decrease as output increases. 
D) Total variable costs equal variable rate × amount of output. 
A) Total variable costs stay the same as output changes. 
B) Total variable costs increase as output decreases. 
C) Total variable costs decrease as output increases. 
D) Total variable costs equal variable rate × amount of output.

Question 7

Drumheller Company's Total cost = Fixed cost + Variable Rate × Output
-Refer to the Figure.Which element is the independent variable?

Accepted Answer

A) fixed cost 
B) total cost 
C) output 
D) variable rate 
A) fixed cost 
B) total cost 
C) output 
D) variable rate

Question 8

Which of the following is characteristic for the method of least squares?

Accepted Answer

A) It uses the results of regression analysis to construct a cost formula. 
B) It is less accurate than the scattergraph method. 
C) It analyzes a cost relationship by graphing the data points. 
D) It can easily be calculated without a calculator. 
A) It uses the results of regression analysis to construct a cost formula. 
B) It is less accurate than the scattergraph method. 
C) It analyzes a cost relationship by graphing the data points. 
D) It can easily be calculated without a calculator.

Question 9

The high-low method is the most accurate method to separate the cost behaviour of a mixed cost.

Accepted Answer

A) True 
 B)False

Question 10

Prince Edward Company produces hand-held calculators. The company controller wanted to calculate the fixed and variable costs associated with the maintenance cost incurred by the factory. Data for the past four months were collected.Coefficients shown by a regression program are as follows:
 $\begin{array}{lrr}& \text { Maintenance } & \text { Machine } \
\text { Month } & \text { cost } & \text { hours }\
\text { March } & \$ 4,180 & 328 \
\text { April } & 3,956 & 310 \
\text { May } & 4,686 & 386 \
\text { June } & 4,240 & 352
\end{array}$ $$\begin{array} { l l } 
\text { Intercept } & 985 \
\text { X Variable 1 } & 9.82
\end{array}$$
-Refer to the Figure.What is the variable rate of maintenance cost when using the results of regression?

Accepted Answer

A) $9.82 per machine hour 
B) $9.85 per machine hour 
C) $12.14 per machine hour 
D) $12.74 per machine hour 
A) $9.82 per machine hour 
B) $9.85 per machine hour 
C) $12.14 per machine hour 
D) $12.74 per machine hour

Question 11

The slope of a mixed cost line is equal to the variable cost per unit element of the cost.

Accepted Answer

A) True 
 B)False

Question 12

What is a variable cost at an equestrian facility?

Accepted Answer

A) salary of the farm manager 
B) cost of registration forms 
C) salary of the horse trainer 
D) rent on the buildings 
A) salary of the farm manager 
B) cost of registration forms 
C) salary of the horse trainer 
D) rent on the buildings

Question 13

The relevant range is the range of activity for which the assumed cost relationships are valid.

Accepted Answer

A) True 
 B)False

Question 14

Select the appropriate type of cost for each of the definitions below.
-Remains the same in total within the relevant range

Accepted Answer

A) Variable 
B) Fixed 
C) Mixed 
D) Step 
A) Variable 
B) Fixed 
C) Mixed 
D) Step

Question 15

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

Accepted Answer

A) direct materials 
B) commissions 
C) electricity 
D) insurance 
A) direct materials 
B) commissions 
C) electricity 
D) insurance

Question 16

The following four months of data were collected on utility cost and the number of labour hours in Edmonton Company's factory.
 $\begin{array}{lrr}& \text { Utility } & \text { Labour } \
\text { Month } & \text { cost } & \text { hours }\
\text { May } & \$ 22,100 & 3,975 \
\text { June } & 24,600 & 5,430 \
\text { July } & 23,500 & 4,400 \
\text { August } & 20,140 & 3,200
\end{array}$
-Refer to the Figure.What would be the estimate of electricity cost if the factory incurred 4,700 labour hours next month?

Accepted Answer

A) $9,400 
B) $19,560 
C) $20,260 
D) $23,140 
A) $9,400 
B) $19,560 
C) $20,260 
D) $23,140

Question 17

Select the appropriate type of fixed cost for each cost listed below.
-Property taxes

Accepted Answer

A) Discretionary 
B) Committed 
A) Discretionary 
B) Committed

Question 18

Prince Albert Company makes cross-country skis.The company controller wants to calculate the fixed and variable costs associated with janitorial services incurred by the factory.Data for the past six months were collected.
Required:
 $\begin{array}{lrr}& \text { Janitorial } & \text { Labour } \
\text { Month } & \text { cost } & \text { hours }\
\text { January } & \$ 9,200 & 10,120 \
\text { February } & 8,800 & 9,500 \
\text { March } & 9,350 & 10,500 \
\text { April } & 9,620 & 11,100 \
\text { May } & 8,400 & 8,660 \
\text { June } & 9,400 & 10,650
\end{array}$ A. Using the high-low method, compute the variable rate of the janitorial cost.
B. Using the high-low method, compute the fixed cost of $ j $ anitorial services.
C. Compute the estimated janitorial cost to be incurred during the next six months assuming that 58,200 labour hours will be worked.

Accepted Answer

The answer of Prince Albert Company makes cross-country skis.The company...

Question 19

Select the appropriate item for each of the definitions listed below.
-Allows a cost analyst to inspect the data visually

Accepted Answer

A) High-low method 
B) Scattergraph method 
C) Method of least squares 
A) High-low method 
B) Scattergraph method 
C) Method of least squares

Question 20

Which factor causes or leads to a change in a cost or activity?

Accepted Answer

A) cost formula 
B) regression line 
C) driver 
D) y-intercept 
A) cost formula 
B) regression line 
C) driver 
D) y-intercept

Select the appropriate type of cost for each of the definitions listed below. -Total cost = fixed cost + variable cost

Select the appropriate item for each of the definitions listed below. -Y-intercept corresponds to the fixed cost

Select the best description for the following: -6.53

Which is a characteristic of the scattergraph method?

Using a linear regression program,the term intercept refers to the fixed cost.

What is the relationship between total variable costs and output?

Drumheller Company's Total cost = Fixed cost + Variable Rate × Output -Refer to the Figure.Which element is the independent variable?

Which of the following is characteristic for the method of least squares?

The high-low method is the most accurate method to separate the cost behaviour of a mixed cost.

The slope of a mixed cost line is equal to the variable cost per unit element of the cost.

What is a variable cost at an equestrian facility?

The relevant range is the range of activity for which the assumed cost relationships are valid.

Select the appropriate type of cost for each of the definitions below. -Remains the same in total within the relevant range

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

Select the appropriate type of fixed cost for each cost listed below. -Property taxes

Select the appropriate item for each of the definitions listed below. -Allows a cost analyst to inspect the data visually

Which factor causes or leads to a change in a cost or activity?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 3: Cost Behaviour

Select the appropriate type of cost for each of the definitions listed below. -Total cost = fixed cost + variable cost

Select the appropriate item for each of the definitions listed below. -Y-intercept corresponds to the fixed cost

Select the best description for the following: -6.53

Which is a characteristic of the scattergraph method?

Using a linear regression program,the term intercept refers to the fixed cost.

What is the relationship between total variable costs and output?

Drumheller Company's Total cost = Fixed cost + Variable Rate × Output -Refer to the Figure.Which element is the independent variable?

Which of the following is characteristic for the method of least squares?

The high-low method is the most accurate method to separate the cost behaviour of a mixed cost.

The slope of a mixed cost line is equal to the variable cost per unit element of the cost.

What is a variable cost at an equestrian facility?

The relevant range is the range of activity for which the assumed cost relationships are valid.

Select the appropriate type of cost for each of the definitions below. -Remains the same in total within the relevant range

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

Select the appropriate type of fixed cost for each cost listed below. -Property taxes

Select the appropriate item for each of the definitions listed below. -Allows a cost analyst to inspect the data visually

Which factor causes or leads to a change in a cost or activity?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters