Question 1

The cost function derived by the least-squares cost estimation method

Accepted Answer

A)  is linear. 
B)  must be tested for minima and maxima. 
C)  is parabolic. 
D)  is quadratic. 
A)  is linear. 
B)  must be tested for minima and maxima. 
C)  is parabolic. 
D)  is quadratic.

Question 2

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

Accepted Answer

A)  unit based cost drivers. 
B)  non-unit level cost drivers. 
C)  activity-based cost drivers. 
D)  none of these. 
A)  unit based cost drivers. 
B)  non-unit level cost drivers. 
C)  activity-based cost drivers. 
D)  none of these.

Question 3

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.What is the unused capacity in dollars?

Accepted Answer

A)  $60,000 
B)  $30,000 
C)  $240,000 
D)  $15,000 
A)  $60,000 
B)  $30,000 
C)  $240,000 
D)  $15,000

Question 4

Which of the following statements is TRUE about fixed and variable costs?

Accepted Answer

A)  Both costs are constant when considered on a per-unit basis. 
B)  Both costs are constant when considered on a total basis. 
C)  Fixed costs are constant in total and variable costs are constant per unit. 
D)  Variable costs are constant in total and fixed costs are constant per unit. 
A)  Both costs are constant when considered on a per-unit basis. 
B)  Both costs are constant when considered on a total basis. 
C)  Fixed costs are constant in total and variable costs are constant per unit. 
D)  Variable costs are constant in total and fixed costs are constant per unit.

Question 5

The following information was taken from a computer printout generated with the least-squares method for use in estimating overhead costs:   The cost formula is

Accepted Answer

A)  Overhead = $5,700 - $45X 
B)  Overhead = $5,700 + $45X 
C)  Overhead = $5,700 + ($45 ´ 0.72) 
D)  Overhead = $5,700 ´ 0.72 
A)  Overhead = $5,700 - $45X 
B)  Overhead = $5,700 + $45X 
C)  Overhead = $5,700 + ($45 ´ 0.72) 
D)  Overhead = $5,700 ´ 0.72

Question 6

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 is parallel to the horizontal axis?

Accepted Answer

A)  total direct material costs 
B)  a consultant paid $75 per hour with a maximum fee of $1,200 
C)  employees who are paid $10 per hour and guaranteed a minimum weekly wage of $200 
D)  rent on exhibit space at a convention 
A)  total direct material costs 
B)  a consultant paid $75 per hour with a maximum fee of $1,200 
C)  employees who are paid $10 per hour and guaranteed a minimum weekly wage of $200 
D)  rent on exhibit space at a convention

Question 7

Figure 3-4 The following information is available for electricity costs for the last six months of the year:
 
- Refer to Figure 3-4.Using the high-low method, estimated variable cost per unit of production is

Accepted Answer

A)  $1.26. 
B)  $1.53. 
C)  $1.65. 
D)  $1.75. 
A)  $1.26. 
B)  $1.53. 
C)  $1.65. 
D)  $1.75.

Question 8

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.Find the t-value for a 90 percent confidence level.

Accepted Answer

A)  1.740 
B)  1.753 
C)  6.314 
D)  2.920 
A)  1.740 
B)  1.753 
C)  6.314 
D)  2.920

Question 9

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

Accepted Answer

A)  A correlation equal to -1 means two alternatives are moving in the same direction, whereas a correlation of +1 means they are moving in opposite directions. 
B)  A correlation equal to -1 means two alternatives are moving in the same direction, whereas a correlation of +1 means they are unrelated. 
C)  A correlation equal to -1 means two alternatives are moving in opposite directions, whereas a correlation of +1 means they are moving in the same direction. 
D)  A correlation equal to -1 means two alternatives are moving in opposite directions, whereas a correlation of +1 means they are unrelated. 
A)  A correlation equal to -1 means two alternatives are moving in the same direction, whereas a correlation of +1 means they are moving in opposite directions. 
B)  A correlation equal to -1 means two alternatives are moving in the same direction, whereas a correlation of +1 means they are unrelated. 
C)  A correlation equal to -1 means two alternatives are moving in opposite directions, whereas a correlation of +1 means they are moving in the same direction. 
D)  A correlation equal to -1 means two alternatives are moving in opposite directions, whereas a correlation of +1 means they are unrelated.

Question 10

Salaries paid to shift supervisors are an example of a

Accepted Answer

A)  step-variable cost. 
B)  step-fixed cost. 
C)  variable cost. 
D)  mixed cost. 
A)  step-variable cost. 
B)  step-fixed cost. 
C)  variable cost. 
D)  mixed cost.

Question 11

Figure 3-6 The following information is available for maintenance costs:
  
-Refer to Figure 3-6.Using a computer or calculator, compute the estimate of maintenance costs at 100 units of production using the method of least squares.This value would be

Accepted Answer

A)  $291. 
B)  $321. 
C)  $336. 
D)  $698. 
A)  $291. 
B)  $321. 
C)  $336. 
D)  $698.

Question 12

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 confidence interval for the predicted overhead cost rounded to the nearest whole number for a 90 percent confidence level?

Accepted Answer

A)  predicted value between 100,557 and 100,644 
B)  predicted value between 100,600 and 175,648 
C)  predicted value between 75,600 and 125,600 
D)  none of these 
A)  predicted value between 100,557 and 100,644 
B)  predicted value between 100,600 and 175,648 
C)  predicted value between 75,600 and 125,600 
D)  none of these

Question 13

The learning curve that decreases by a constant percentage each time the cumulative quantity doubles is known as the

Accepted Answer

A)  cumulative average-time model. 
B)  cumulative total-time model. 
C)  incremental unit-time model. 
D)  decremental average-time model. 
A)  cumulative average-time model. 
B)  cumulative total-time model. 
C)  incremental unit-time model. 
D)  decremental average-time model.

Question 14

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

Accepted Answer

A)  cost of disposable surgical scissors, which are purchased in increments of 100 
B)  cost of soaking solution to clean jewelry (Each jar can soak 50 rings before losing effectiveness.) 
C)  cost of tuition at $300 per credit hour up to 15 credit hours (Hours taken in excess of 15 hours are free.) 
D)  cost of disposable gowns used by patients in a hospital 
A)  cost of disposable surgical scissors, which are purchased in increments of 100 
B)  cost of soaking solution to clean jewelry (Each jar can soak 50 rings before losing effectiveness.) 
C)  cost of tuition at $300 per credit hour up to 15 credit hours (Hours taken in excess of 15 hours are free.) 
D)  cost of disposable gowns used by patients in a hospital

Question 15

The cost behavior method that may use time and motion studies to determine the activities and amounts for cost behavior analysis is

Accepted Answer

A)  account analysis method. 
B)  industrial engineering method. 
C)  regression analysis. 
D)  high-low method. 
A)  account analysis method. 
B)  industrial engineering method. 
C)  regression analysis. 
D)  high-low method.

Question 16

The high-low method may give unsatisfactory results if

Accepted Answer

A)  the data points all fall on a line. 
B)  volume of activity is heavy. 
C)  volume of activity is light. 
D)  the points are unrepresentative. 
A)  the data points all fall on a line. 
B)  volume of activity is heavy. 
C)  volume of activity is light. 
D)  the points are unrepresentative.

Question 17

Figure 3-2 A company usually processes 20,000 orders at a total cost of $300,000.During the year, only 16,000 orders were processed.
-
Refer to Figure 3-2.What is the cost of resource usage?

Accepted Answer

A)  $300,000 
B)  $240,000 
C)  $30 
D)  $60,000 
A)  $300,000 
B)  $240,000 
C)  $30 
D)  $60,000

Question 18

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 activity rate per change order.

Accepted Answer

A)  $4 per change order 
B)  $10 per change order 
C)  $40 per change order 
D)  $15 per change order 
A)  $4 per change order 
B)  $10 per change order 
C)  $40 per change order 
D)  $15 per change order

Question 19

__________ explain changes in costs as units produced change.

Accepted Answer

A)  Non-unit-level drivers 
B)  Activity based cost drivers 
C)  Unit-level drivers 
D)  All of these 
A)  Non-unit-level drivers 
B)  Activity based cost drivers 
C)  Unit-level drivers 
D)  All of these

Question 20

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.The degrees of freedom for the model is

Accepted Answer

A)  157. 
B)  158. 
C)  159. 
D)  160. 
A)  157. 
B)  158. 
C)  159. 
D)  160.

The cost function derived by the least-squares cost estimation method

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

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.What is the unused capacity in dollars?

Which of the following statements is TRUE about fixed and variable costs?

The following information was taken from a computer printout generated with the least-squares method for use in estimating overhead costs: The cost formula is

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 is parallel to the horizontal axis?

Figure 3-4 The following information is available for electricity costs for the last six months of the year: - Refer to Figure 3-4.Using the high-low method, estimated variable cost per unit of production is

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.Find the t-value for a 90 percent confidence level.

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

Salaries paid to shift supervisors are an example of a

Figure 3-6 The following information is available for maintenance costs: -Refer to Figure 3-6.Using a computer or calculator, compute the estimate of maintenance costs at 100 units of production using the method of least squares.This value would be

The learning curve that decreases by a constant percentage each time the cumulative quantity doubles is known as the

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

The cost behavior method that may use time and motion studies to determine the activities and amounts for cost behavior analysis is

The high-low method may give unsatisfactory results if

Figure 3-2 A company usually processes 20,000 orders at a total cost of $300,000.During the year, only 16,000 orders were processed. - Refer to Figure 3-2.What is the cost of resource usage?

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 activity rate per change order.

__________ explain changes in costs as units produced change.

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.The degrees of freedom for the model is

Introduction to Cost Management

Basic Cost Management Concepts

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 3: Cost Behavior

The cost function derived by the least-squares cost estimation method

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

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.What is the unused capacity in dollars?

Which of the following statements is TRUE about fixed and variable costs?

The following information was taken from a computer printout generated with the least-squares method for use in estimating overhead costs: The cost formula is

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 is parallel to the horizontal axis?

Figure 3-4 The following information is available for electricity costs for the last six months of the year: - Refer to Figure 3-4.Using the high-low method, estimated variable cost per unit of production is

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.Find the t-value for a 90 percent confidence level.

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

Salaries paid to shift supervisors are an example of a

Figure 3-6 The following information is available for maintenance costs: -Refer to Figure 3-6.Using a computer or calculator, compute the estimate of maintenance costs at 100 units of production using the method of least squares.This value would be

The learning curve that decreases by a constant percentage each time the cumulative quantity doubles is known as the

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

The cost behavior method that may use time and motion studies to determine the activities and amounts for cost behavior analysis is

The high-low method may give unsatisfactory results if

Figure 3-2 A company usually processes 20,000 orders at a total cost of $300,000.During the year, only 16,000 orders were processed. - Refer to Figure 3-2.What is the cost of resource usage?

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 activity rate per change order.

__________ explain changes in costs as units produced change.

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.The degrees of freedom for the model is

Introduction to Cost Management

Basic Cost Management Concepts

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters