Question 1

Select the appropriate cost behaviour for each of the costs listed below.
-Depreciation

Accepted Answer

A) Variable 
B) Fixed 
A) Variable 
B) Fixed

Question 2

What is the range of activity within which a cost function is valid?

Accepted Answer

A) the relevant range 
B) the normal range 
C) the activity range 
D) the discretionary range 
A) the relevant range 
B) the normal range 
C) the activity range 
D) the discretionary range

Question 3

The method of least squares was used to develop a cost equation to predict the cost of monthly equipment maintenance for the Regina Company. The following computer output was received:
The driver used was the number of machine hours.
 $\begin{array}{lr}
\text { Intercept } & 32,000 \
\text { Slope } & 25
\end{array}$
-Refer to the Figure.Assume that 5,000 machine hours will be incurred in April.What would be the predicted cost of equipment maintenance for April when using the cost formula for equipment maintenance?

Accepted Answer

A) $32,000 
B) $93,000 
C) $125,000 
D) $157,000 
A) $32,000 
B) $93,000 
C) $125,000 
D) $157,000

Question 4

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

Accepted Answer

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

Question 5

The following six months of data were collected on electricity cost and the number of machine hours in a factory.
Required:
 $\begin{array}{lrr}& \text { Utility } & \text { Machine } \\text { Month } &\text { cost }&\text { hours }\
\text { June } & \$ 25,160 & 4,500 \
\text { July } & 26,170 & 4,810 \
\text { August } & 27,250 & 5,120 \
\text { September } & 26,680 & 5,010 \
\text { October } & 27,950 & 5,430 \
\text { November } & 27,500 & 5,190
\end{array}$ A. Using the high-low method, compute the variable rate for the electricity cost.
B. Using the high-low method, compute the fixed cost of electricity.
C. Estimate the total electricity cost to be incurred in December if 5,300 machine hours are incurred.

Accepted Answer

The answer of The following six months of data were...

Question 6

Select the appropriate cost behaviour for the following costs incurred by a bicycle manufacturer.
-Cost of transporting bicycles to retailer

Accepted Answer

A) Variable 
B) Fixed 
A) Variable 
B) Fixed

Question 7

Toronto Company makes cell phones. The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory. Data for the past four months were collected.Coefficients shown by a regression program are:
 $\begin{array}{lrr}& \text { Electricity } & \text { Machine } \
\text { Month } & \text { cost } & \text { hours }\
\text { May } & \$ 7,560 & 570 \
\text { June } & 8,220 & 625 \
\text { July } & 7,480 & 546 \
\text { August } & 7,186 & 518
\end{array}$ $\begin{array}{ll}
\text { Intercept } & 2,225 \
\text { X Variable 1 } & 9.75
\end{array}$
-Refer to the Figure.What is the fixed cost of electricity when using the results of regression?

Accepted Answer

A) $2,180 
B) $2,200 
C) $2,225 
D) $2,250 
A) $2,180 
B) $2,200 
C) $2,225 
D) $2,250

Question 8

Lethbridge Company constructed the following formula for monthly utility cost.
Total utility cost = $1,400 + ($10.10 × labour hours)
Assume that 800 labour hours are budgeted for the month of May.
-Refer to the Figure.What is the total utility cost for the month of May?

Accepted Answer

A) $1,400 
B) $5,440 
C) $8,080 
D) $9,480 
A) $1,400 
B) $5,440 
C) $8,080 
D) $9,480

Question 9

Select the appropriate cost behaviour for each of the costs listed below.
-Sales commissions

Accepted Answer

A) Variable 
B) Fixed 
A) Variable 
B) Fixed

Question 10

London Company makes hearing aids.London has found that total electricity cost for the factory can be represented by the following formula: total annual electricity cost = $165,000 + $2.75x,where x = labour hours.Last year,London incurred 225,000 labour hours.
Required:
 A. What is the independent variable in London's cost formula?
B. What was the total electricity cost incurred by London last year?
C. What would be London Company's estimated electricity cost for next year if they have budgeted 245,000 labour hours?

Accepted Answer

The answer of London Company makes hearing aids.London has found...

Question 11

Total variable costs = variable rate/amount of output.

Accepted Answer

A) True 
 B)False

Question 12

Select the appropriate cost behaviour for each of the costs listed below.
-Machine lubricant

Accepted Answer

A) Variable 
B) Fixed 
A) Variable 
B) Fixed

Question 13

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

Accepted Answer

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

Question 14

Select the appropriate type of fixed cost for each cost listed below.
-Salary of manager

Accepted Answer

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

Question 15

Select the appropriate cost behaviour for each of the costs listed below.
-Factory supplies

Accepted Answer

A) Variable 
B) Fixed 
A) Variable 
B) Fixed

Question 16

Describe the three methods used to determine cost behaviour.

Accepted Answer

The three methods used to determine cost

Question 17

Select the appropriate item for each of the definitions listed below.
-Involves plotting data points on a graph

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 18

A committed fixed cost can be changed relatively easily at management discretion.

Accepted Answer

A) True 
 B)False

Question 19

Select the appropriate item for each of the definitions listed below.
-Is a statistical method

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

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 cost formula for maintenance cost when using the result of regression?

Accepted Answer

A) $985 × machine hours 
B) ($4,686 ? $3,956)/(386 ? 310) 
C) $9.82 × machine hours 
D) $985 + ($9.82 × machine hours) 
A) $985 × machine hours 
B) ($4,686 ? $3,956)/(386 ? 310) 
C) $9.82 × machine hours 
D) $985 + ($9.82 × machine hours)

Select the appropriate cost behaviour for each of the costs listed below. -Depreciation

What is the range of activity within which a cost function is valid?

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

Select the appropriate cost behaviour for the following costs incurred by a bicycle manufacturer. -Cost of transporting bicycles to retailer

Lethbridge Company constructed the following formula for monthly utility cost. Total utility cost = $1,400 + ($10.10 × labour hours) Assume that 800 labour hours are budgeted for the month of May. -Refer to the Figure.What is the total utility cost for the month of May?

Select the appropriate cost behaviour for each of the costs listed below. -Sales commissions

Total variable costs = variable rate/amount of output.

Select the appropriate cost behaviour for each of the costs listed below. -Machine lubricant

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

Select the appropriate type of fixed cost for each cost listed below. -Salary of manager

Select the appropriate cost behaviour for each of the costs listed below. -Factory supplies

Describe the three methods used to determine cost behaviour.

Select the appropriate item for each of the definitions listed below. -Involves plotting data points on a graph

A committed fixed cost can be changed relatively easily at management discretion.

Select the appropriate item for each of the definitions listed below. -Is a statistical method

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 cost behaviour for each of the costs listed below. -Depreciation

What is the range of activity within which a cost function is valid?

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

Select the appropriate cost behaviour for the following costs incurred by a bicycle manufacturer. -Cost of transporting bicycles to retailer

Lethbridge Company constructed the following formula for monthly utility cost. Total utility cost = $1,400 + ($10.10 × labour hours) Assume that 800 labour hours are budgeted for the month of May. -Refer to the Figure.What is the total utility cost for the month of May?

Select the appropriate cost behaviour for each of the costs listed below. -Sales commissions

Total variable costs = variable rate/amount of output.

Select the appropriate cost behaviour for each of the costs listed below. -Machine lubricant

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

Select the appropriate type of fixed cost for each cost listed below. -Salary of manager

Select the appropriate cost behaviour for each of the costs listed below. -Factory supplies

Describe the three methods used to determine cost behaviour.

Select the appropriate item for each of the definitions listed below. -Involves plotting data points on a graph

A committed fixed cost can be changed relatively easily at management discretion.

Select the appropriate item for each of the definitions listed below. -Is a statistical method

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