Exam 3: Cost Behavior

A steep slope in the variable cost line indicates a

English Corporation analyzed the relationship between total factory overhead and changes in direct labor hours.It found the following: Y = $6,000 + $6X The Y in the equation is an estimate of

When the volume of activity increases within the relevant range, the fixed cost per unit

Total costs may be computed as follows:

The range of activity within which a linear cost function is valid is called the

Boss Company currently leases a delivery van from Check Enterprises for a fee of $250 per month plus $0.40 per mile.Management is evaluating the desirability of switching to a modern, fuel-efficient van, which can be leased from David, Inc., for a fee of $600 per month plus $0.05 per mile.All operating costs and fuel are included in the rental fees.In general, a lease from

Figure 3-7 The following computer printout estimated overhead costs using regression: Please find the following statistical table During the last accounting period 10,000 DLH were worked. - Refer to Figure 3-7.What is the model?

Baker Enterprises developed a cost function for manufacturing overhead costs of Y = $8,000 + $1.60X.Estimated manufacturing overhead costs at 10,000 units of production are

The following data were obtained from the books of Thomas Company: Required: Use a computer or calculator to prepare the following:

What does a correlation coefficient near -1 mean?

Committed resources

Figure 3-9 Abboud 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 batch unit time (labor hours) to produce 2,000 units based on the cumulative average time learning curve?

Which of the following would be an example of a unit-based cost driver?

Figure 3-7 The following computer printout estimated overhead costs using regression: Please find the following statistical table During the last accounting period 10,000 DLH were worked. - Refer to Figure 3-7.The coefficient of determination in this model tells us that

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

The appropriate range for the coefficient of correlation (r) is

Figure 3-3 Mork 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.

The following computer printout estimated overhead costs using linear regression: Table of Selected Values: t Distribution What is the interval around Y if 95 percent confidence is desired?

Which of the following is NOT a correct statement concerning cost behavior?

The coefficient of determination is