Question 1

All of the following terms refer to a similar cost concept except:

Accepted Answer

A) discretionary costs 
B) managed costs 
C) programmed costs 
D) costs to achieve short run goals 
A) discretionary costs 
B) managed costs 
C) programmed costs 
D) costs to achieve short run goals

Question 2

Which of the following is true?

Accepted Answer

A) A change in fixed costs (other than for inflation or other price changes)usually involves a change in long-term assets,whereas a change in semi-fixed costs often does not. 
B) A change in fixed costs (other than for inflation or other price changes)usually involves a change in short-term assets,whereas a change in semi-fixed costs often does not. 
C) A change in semivariable costs (other than for inflation or other price changes)usually involves a change in long-term assets,whereas a change in semi-fixed costs often does not. 
D) A change in semivariable costs (other than for inflation or other price changes)usually involves a change in short-term assets,whereas a change in semi-fixed costs often does not. 
A) A change in fixed costs (other than for inflation or other price changes)usually involves a change in long-term assets,whereas a change in semi-fixed costs often does not. 
B) A change in fixed costs (other than for inflation or other price changes)usually involves a change in short-term assets,whereas a change in semi-fixed costs often does not. 
C) A change in semivariable costs (other than for inflation or other price changes)usually involves a change in long-term assets,whereas a change in semi-fixed costs often does not. 
D) A change in semivariable costs (other than for inflation or other price changes)usually involves a change in short-term assets,whereas a change in semi-fixed costs often does not.

Question 3

When a fixed cost changes,which of the following will also generally change?

Accepted Answer

A) accounts receivable. 
B) notes receivable. 
C) marketable securities. 
D) long-term assets. 
A) accounts receivable. 
B) notes receivable. 
C) marketable securities. 
D) long-term assets.

Question 4

Which of the following terms describes the cost of producing the next unit?

Accepted Answer

A) marginal cost. 
B) programmed cost. 
C) managed cost. 
D) next cost. 
A) marginal cost. 
B) programmed cost. 
C) managed cost. 
D) next cost.

Question 5

The experience curve effect is found

Accepted Answer

A) when unit product costs are increasing. 
B) whenever there are experienced workers. 
C) in newer products or processes. 
D) All of the answers are correct. 
A) when unit product costs are increasing. 
B) whenever there are experienced workers. 
C) in newer products or processes. 
D) All of the answers are correct.

Question 6

Narrative 5-1
The following question(s)refer to the this equation analyzing the relationship of total cost to changes in machine hours.The following relationship was determined:
TC = $2,200 + $3X
Refer to Narrative 5-1.The TC in the above equation is an estimate of which of the following?

Accepted Answer

A) total variable costs. 
B) total costs. 
C) total fixed costs. 
D) total machine hours. 
A) total variable costs. 
B) total costs. 
C) total fixed costs. 
D) total machine hours.

Question 7

J-Mobile provides cellular phone and Internet services with a plan that provides up to 1,000 minutes of airtime usage for a flat rate of $99.99 per month plus a charge for any minutes used over this amount at the rate of $0.10 per minute in excess of the minimum 1,000 airtime minutes.Which of the following describes the cost of the J-Mobile service?

Accepted Answer

A) fixed cost,only. 
B) variable cost,only. 
C) mixed cost. 
D) semi-fixed cost. 
A) fixed cost,only. 
B) variable cost,only. 
C) mixed cost. 
D) semi-fixed cost.

Question 8

Which of the following terms describe the level of activity over which the firm expects a set of cost behaviors to be consistent?

Accepted Answer

A) marginal activity. 
B) range of opportunity. 
C) relevant range. 
D) margin of safety. 
A) marginal activity. 
B) range of opportunity. 
C) relevant range. 
D) margin of safety.

Question 9

Which term describes costs that a firm does not have to incur in the short run to operate the business?

Accepted Answer

A) discretionary costs. 
B) committed costs. 
C) required costs 
D) All of the answers are correct. 
A) discretionary costs. 
B) committed costs. 
C) required costs 
D) All of the answers are correct.

Question 10

Which of the following statements is true?

Accepted Answer

A) Semi-fixed costs increase in steps. 
B) Semi-fixed costs usually involve a change in long-term assets. 
C) Semi-fixed costs are curvilinear functions. 
D) Semi-fixed costs have both fixed and variable components. 
A) Semi-fixed costs increase in steps. 
B) Semi-fixed costs usually involve a change in long-term assets. 
C) Semi-fixed costs are curvilinear functions. 
D) Semi-fixed costs have both fixed and variable components.

Question 11

Distinguish between variable costs and fixed costs,between short run and long run,and define the relevant range.

Accepted Answer

Total variable costs change as the level

Question 12

What does the learning curve function show?

Accepted Answer

A) The amount of time required to perform a task goes up per unit as the number of units increases. 
B) The amount of time required to perform a task goes up per unit as the number of units decreases. 
C) The amount of time required to perform a task goes down per unit as the number of units increases. 
D) The amount of time required to perform a task goes down per unit as the number of units decreases. 
A) The amount of time required to perform a task goes up per unit as the number of units increases. 
B) The amount of time required to perform a task goes up per unit as the number of units decreases. 
C) The amount of time required to perform a task goes down per unit as the number of units increases. 
D) The amount of time required to perform a task goes down per unit as the number of units decreases.

Question 13

The managers of Rockhurst Brewery are analyzing the costs involved in their beer production.
Rockhurst hired an engineering consulting firm to perform an engineering estimate of its business costs.The consulting firm came up with the following monthly cost estimates based on information for the current period:
   
*Cost drivers: volume of beer produced (in hectoliters,i.e. ,1 hL = 100 L),total amount of raw materials used (in kilograms),number of batches,volume of water used (in hL),number of cleaning procedures performed-cleanings in place (CIPs)-and number of new products.
Required:
Assuming the following level of cost driver volume for a month,what is the estimated cost using the engineering estimates? (Don't forget to include the facilities costs in your estimate. )
   
(Rockhurst Brewery;engineering method. )

Accepted Answer

The answer of The managers of Rockhurst Brewery are analyzing...

Question 14

To make the line the "best fit" to the data,the method of least squares fits a line to the data to minimize the sum of all the squared

Accepted Answer

A) residuals. 
B) independent variables. 
C) variances. 
D) dependent variables. 
A) residuals. 
B) independent variables. 
C) variances. 
D) dependent variables.

Question 15

The best use by managers of cost behavior patterns is to

Accepted Answer

A) estimate how activities affect costs and forecast costs. 
B) estimate how activities affect subordinate behavior. 
C) control subordinate behavior. 
D) reward and punish subordinates. 
A) estimate how activities affect costs and forecast costs. 
B) estimate how activities affect subordinate behavior. 
C) control subordinate behavior. 
D) reward and punish subordinates.

Question 16

Narrative 5-1
The following question(s)refer to the this equation analyzing the relationship of total cost to changes in machine hours.The following relationship was determined:
TC = $2,200 + $3X
Refer to Narrative 5-1.The dependent variable is which of the following?

Accepted Answer

A) TC 
B) $2,200 
C) $3 
D) X 
A) TC 
B) $2,200 
C) $3 
D) X

Question 17

Which of the following is a cost that changes as the level of activity changes?

Accepted Answer

A) fixed costs. 
B) engineered costs. 
C) sunk costs. 
D) opportunity costs. 
A) fixed costs. 
B) engineered costs. 
C) sunk costs. 
D) opportunity costs.

Question 18

Which of the following is a major weakness of the engineering method of cost estimation?

Accepted Answer

A) The method is not particularly useful when the physical relation between inputs and outputs is indirect. 
B) The method is subjective. 
C) The method requires that several relatively strict assumptions be satisfied. 
D) The method is based on studies of what future costs should be rather than what past costs have been. 
A) The method is not particularly useful when the physical relation between inputs and outputs is indirect. 
B) The method is subjective. 
C) The method requires that several relatively strict assumptions be satisfied. 
D) The method is based on studies of what future costs should be rather than what past costs have been.

Question 19

Which of the following terms describes the range of activity over which the firm expects a set of cost behaviors to be consistent?

Accepted Answer

A) irrelevant range. 
B) relevant range. 
C) short-range. 
D) long-range. 
A) irrelevant range. 
B) relevant range. 
C) short-range. 
D) long-range.

Question 20

Which of the following statements is true?

Accepted Answer

A) The standard error of the estimate represents a measure of variability of the actual observations from the regression line. 
B) The standard error of the estimate represents a range of values over which the probability may be estimated based upon the regression equation. 
C) The standard error of the estimate represents a variability about the regression line that is uniform for all values of the independent variable in the data. 
D) The standard error of the estimate represents the proportion of the variance explained by the independent variable. 
A) The standard error of the estimate represents a measure of variability of the actual observations from the regression line. 
B) The standard error of the estimate represents a range of values over which the probability may be estimated based upon the regression equation. 
C) The standard error of the estimate represents a variability about the regression line that is uniform for all values of the independent variable in the data. 
D) The standard error of the estimate represents the proportion of the variance explained by the independent variable.

All of the following terms refer to a similar cost concept except:

Which of the following is true?

When a fixed cost changes,which of the following will also generally change?

Which of the following terms describes the cost of producing the next unit?

The experience curve effect is found

Narrative 5-1 The following question(s)refer to the this equation analyzing the relationship of total cost to changes in machine hours.The following relationship was determined: TC = $2,200 + $3X Refer to Narrative 5-1.The TC in the above equation is an estimate of which of the following?

Which of the following terms describe the level of activity over which the firm expects a set of cost behaviors to be consistent?

Which term describes costs that a firm does not have to incur in the short run to operate the business?

Which of the following statements is true?

Distinguish between variable costs and fixed costs,between short run and long run,and define the relevant range.

What does the learning curve function show?

To make the line the "best fit" to the data,the method of least squares fits a line to the data to minimize the sum of all the squared

The best use by managers of cost behavior patterns is to

Narrative 5-1 The following question(s)refer to the this equation analyzing the relationship of total cost to changes in machine hours.The following relationship was determined: TC = $2,200 + $3X Refer to Narrative 5-1.The dependent variable is which of the following?

Which of the following is a cost that changes as the level of activity changes?

Which of the following is a major weakness of the engineering method of cost estimation?

Which of the following terms describes the range of activity over which the firm expects a set of cost behaviors to be consistent?

Which of the following statements is true?

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters

Exam 5: Cost Drivers and Cost Behavior

All of the following terms refer to a similar cost concept except:

Which of the following is true?

When a fixed cost changes,which of the following will also generally change?

Which of the following terms describes the cost of producing the next unit?

The experience curve effect is found

Narrative 5-1 The following question(s)refer to the this equation analyzing the relationship of total cost to changes in machine hours.The following relationship was determined: TC = $2,200 + $3X Refer to Narrative 5-1.The TC in the above equation is an estimate of which of the following?

Which of the following terms describe the level of activity over which the firm expects a set of cost behaviors to be consistent?

Which term describes costs that a firm does not have to incur in the short run to operate the business?

Which of the following statements is true?

Distinguish between variable costs and fixed costs,between short run and long run,and define the relevant range.

What does the learning curve function show?

To make the line the "best fit" to the data,the method of least squares fits a line to the data to minimize the sum of all the squared

The best use by managers of cost behavior patterns is to

Narrative 5-1 The following question(s)refer to the this equation analyzing the relationship of total cost to changes in machine hours.The following relationship was determined: TC = $2,200 + $3X Refer to Narrative 5-1.The dependent variable is which of the following?

Which of the following is a cost that changes as the level of activity changes?

Which of the following is a major weakness of the engineering method of cost estimation?

Which of the following terms describes the range of activity over which the firm expects a set of cost behaviors to be consistent?

Which of the following statements is true?

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters