Question 1

_______________ are costs incurred that provide long-term activity capacity, usually as the result of strategic planning.

Accepted Answer

A)  Discretionary fixed expenses 
B)  Committed fixed expenses 
C)  Mixed costs 
D)  Step-variable costs 
A)  Discretionary fixed expenses 
B)  Committed fixed expenses 
C)  Mixed costs 
D)  Step-variable costs

Question 2

Parker Corp.has developed the following information on product costs and inventories for a three-month period:   Manufacturing costs $3,000 $5,000 $4,500
Based on managerial judgment, the best predictor of manufacturing costs is

Accepted Answer

A)  beginning inventory. 
B)  units manufactured. 
C)  ending inventory. 
D)  units available. 
A)  beginning inventory. 
B)  units manufactured. 
C)  ending inventory. 
D)  units available.

Question 3

Which of the following statements is NOT true?

Accepted Answer

A)  In selecting an independent variable for cost behavior analysis, it is important to determine the activity that causes the cost being analyzed to occur. 
B)  Professional judgment is very important in selecting an activity measure for a particular cost. 
C)  A low correlation between two variables proves that one causes the other. 
D)  The least-squares cost estimation method can be used to measure the linear function. 
A)  In selecting an independent variable for cost behavior analysis, it is important to determine the activity that causes the cost being analyzed to occur. 
B)  Professional judgment is very important in selecting an activity measure for a particular cost. 
C)  A low correlation between two variables proves that one causes the other. 
D)  The least-squares cost estimation method can be used to measure the linear function.

Question 4

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 variable cost per unit of production using the method of least squares.Rounded to two decimal places, this value would be

Accepted Answer

A)  $3.21. 
B)  $2.70. 
C)  $1.31. 
D)  $1.23. 
A)  $3.21. 
B)  $2.70. 
C)  $1.31. 
D)  $1.23.

Question 5

An equipment lease that specifies a payment of $5,000 per month plus $8 per machine hour used is an example of a

Accepted Answer

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

Question 6

The Knapp Company needs to predict the labor cost in producing small carrot patch dolls.The following production information is available:
   Wage rates have steadily increased since 2005; however, management expects no further increases in 2011.
Required:

Accepted Answer

@#IMG-DLM&_TB2043_00

Question 7

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 model being measured is

Accepted Answer

A)  Overhead = 1,000 + 25(Setup hours) + 100(# of parts) 
B)  Overhead = 510 + 0.305(Setup hours) + 10.527(# of parts) 
C)  Overhead = 0.98 + 40.98(Setup hours) + 4.865(# of parts) 
D)  Overhead = 1,000 + 25(Setup hours) 
A)  Overhead = 1,000 + 25(Setup hours) + 100(# of parts) 
B)  Overhead = 510 + 0.305(Setup hours) + 10.527(# of parts) 
C)  Overhead = 0.98 + 40.98(Setup hours) + 4.865(# of parts) 
D)  Overhead = 1,000 + 25(Setup hours)

Question 8

The following computer printout estimated overhead costs using regression:   What is the 95 percent confidence interval around the slope estimate?

Accepted Answer

A)  11.98 to 16.13 
B)  10.67 to 17.45 
C)  9.57 to 18.54 
D)  9.64 to 18.46 
A)  11.98 to 16.13 
B)  10.67 to 17.45 
C)  9.57 to 18.54 
D)  9.64 to 18.46

Question 9

The direct material cost is $10,000 when 2,000 units are produced.What is the direct material cost for 2,500 units produced?

Accepted Answer

A)  $10,000 
B)  $ 8,000 
C)  $15,000 
D)  $12,500 
A)  $10,000 
B)  $ 8,000 
C)  $15,000 
D)  $12,500

Question 10

Which of the following decision-making tools would NOT be useful in determining the slope and intercept of a mixed cost?

Accepted Answer

A)  linear programming 
B)  least-squares method 
C)  high-low method 
D)  scattergraphs 
A)  linear programming 
B)  least-squares method 
C)  high-low method 
D)  scattergraphs

Question 11

For each of the following situations, draw a graph that best describes the cost behavior pattern.The vertical axis represents costs, and the horizontal axis represents volume.

Accepted Answer

The answer of For each of the following situations, draw...

Question 12

Machine hours and electricity costs for Wells Industries for the year 2011 are as follows:
   Required:

Accepted Answer

The answer of Machine hours and electricity costs for Wells...

Question 13

Figure 3-1 ALF Systems undertakes its own machine maintenance.The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour.Last year 275,000 machine hours were used to produce 100,000 units.
-
See Figure 3-1.What is the total maintenance cost per unit produced?

Accepted Answer

A)  $0.55 
B)  $4.20 
C)  $5.50 
D)  $5.70 
A)  $0.55 
B)  $4.20 
C)  $5.50 
D)  $5.70

Question 14

A supervisor's salary of $2,000 per month is an example of a

Accepted Answer

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

Question 15

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

Accepted Answer

A)  slope. 
B)  intercept. 
C)  dependent variable. 
D)  independent variable. 
A)  slope. 
B)  intercept. 
C)  dependent variable. 
D)  independent variable.

Question 16

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

Accepted Answer

A)  slope. 
B)  intercept. 
C)  dependent variable. 
D)  total variable costs. 
A)  slope. 
B)  intercept. 
C)  dependent variable. 
D)  total variable costs.

Question 17

Which of the following statements is TRUE about relevant range?

Accepted Answer

A)  When costs reach a level above the relevant range, they are considered appropriate for analysis. 
B)  Linear estimates of an economist's curvilinear cost function is only valid within the relevant range. 
C)  When costs reach a level below the relevant range, they are considered appropriate for analysis. 
D)  The nonlinear relevant range is ignored, and only those costs outside of this range may be considered. 
A)  When costs reach a level above the relevant range, they are considered appropriate for analysis. 
B)  Linear estimates of an economist's curvilinear cost function is only valid within the relevant range. 
C)  When costs reach a level below the relevant range, they are considered appropriate for analysis. 
D)  The nonlinear relevant range is ignored, and only those costs outside of this range may be considered.

Question 18

The following cost functions were developed for manufacturing overhead costs:   If June production is expected to be 2,000 units requiring 3,000 direct labor hours, estimated manufacturing overhead costs would be

Accepted Answer

A)  $218,600. 
B)  $198,000. 
C)  $152,600. 
D)  $20,733. 
A)  $218,600. 
B)  $198,000. 
C)  $152,600. 
D)  $20,733.

Question 19

Figure 3-1 ALF Systems undertakes its own machine maintenance.The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour.Last year 275,000 machine hours were used to produce 100,000 units.
-
See Figure 3-1.If 300,000 machine hours had been worked last year, what would be the total machine maintenance cost?

Accepted Answer

A)  $600,000 
B)  $620,000 
C)  $420,000 
D)  $220,000 
A)  $600,000 
B)  $620,000 
C)  $420,000 
D)  $220,000

Question 20

The confidence interval for the predicted value of Y

Accepted Answer

A)  is constructed by multiplying the t-statistic times the standard error. 
B)  is a measure of the likelihood that the prediction interval will not contain the actual cost. 
C)  can only be computed with 95 percent confidence. 
D)  all of these. 
A)  is constructed by multiplying the t-statistic times the standard error. 
B)  is a measure of the likelihood that the prediction interval will not contain the actual cost. 
C)  can only be computed with 95 percent confidence. 
D)  all of these.

_______________ are costs incurred that provide long-term activity capacity, usually as the result of strategic planning.

Parker Corp.has developed the following information on product costs and inventories for a three-month period: Manufacturing costs $3,000 $5,000 $4,500 Based on managerial judgment, the best predictor of manufacturing costs is

Which of the following statements is NOT true?

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 variable cost per unit of production using the method of least squares.Rounded to two decimal places, this value would be

An equipment lease that specifies a payment of $5,000 per month plus $8 per machine hour used is an example of a

The Knapp Company needs to predict the labor cost in producing small carrot patch dolls.The following production information is available: Wage rates have steadily increased since 2005; however, management expects no further increases in 2011. Required:

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 model being measured is

The following computer printout estimated overhead costs using regression: What is the 95 percent confidence interval around the slope estimate?

The direct material cost is $10,000 when 2,000 units are produced.What is the direct material cost for 2,500 units produced?

Which of the following decision-making tools would NOT be useful in determining the slope and intercept of a mixed cost?

For each of the following situations, draw a graph that best describes the cost behavior pattern.The vertical axis represents costs, and the horizontal axis represents volume.

Machine hours and electricity costs for Wells Industries for the year 2011 are as follows: Required:

Figure 3-1 ALF Systems undertakes its own machine maintenance.The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour.Last year 275,000 machine hours were used to produce 100,000 units. - See Figure 3-1.What is the total maintenance cost per unit produced?

A supervisor's salary of $2,000 per month is an example of a

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

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

Which of the following statements is TRUE about relevant range?

The following cost functions were developed for manufacturing overhead costs: If June production is expected to be 2,000 units requiring 3,000 direct labor hours, estimated manufacturing overhead costs would be

The confidence interval for the predicted value of Y

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

_______________ are costs incurred that provide long-term activity capacity, usually as the result of strategic planning.

Parker Corp.has developed the following information on product costs and inventories for a three-month period: Manufacturing costs $3,000 $5,000 $4,500 Based on managerial judgment, the best predictor of manufacturing costs is

Which of the following statements is NOT true?

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 variable cost per unit of production using the method of least squares.Rounded to two decimal places, this value would be

An equipment lease that specifies a payment of $5,000 per month plus $8 per machine hour used is an example of a

The Knapp Company needs to predict the labor cost in producing small carrot patch dolls.The following production information is available: Wage rates have steadily increased since 2005; however, management expects no further increases in 2011. Required:

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 model being measured is

The following computer printout estimated overhead costs using regression: What is the 95 percent confidence interval around the slope estimate?

The direct material cost is $10,000 when 2,000 units are produced.What is the direct material cost for 2,500 units produced?

Which of the following decision-making tools would NOT be useful in determining the slope and intercept of a mixed cost?

For each of the following situations, draw a graph that best describes the cost behavior pattern.The vertical axis represents costs, and the horizontal axis represents volume.

Machine hours and electricity costs for Wells Industries for the year 2011 are as follows: Required:

Figure 3-1 ALF Systems undertakes its own machine maintenance.The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour.Last year 275,000 machine hours were used to produce 100,000 units. - See Figure 3-1.What is the total maintenance cost per unit produced?

A supervisor's salary of $2,000 per month is an example of a

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

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

Which of the following statements is TRUE about relevant range?

The following cost functions were developed for manufacturing overhead costs: If June production is expected to be 2,000 units requiring 3,000 direct labor hours, estimated manufacturing overhead costs would be

The confidence interval for the predicted value of Y

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