Question 1

The total cost (TC)of an item is calculated as TC = F + VX,where X is the

Accepted Answer

A) unexpected cost during the period. 
B) unusual cost during the period. 
C) units of activity during the period. 
D) unknown cost during the period. 
A) unexpected cost during the period. 
B) unusual cost during the period. 
C) units of activity during the period. 
D) unknown cost during the period.

Question 2

Columbia Hospital for Women is planning to expand its labor and delivery room facilities.Although variable costs per patient will remain unchanged,fixed costs will increase by 20 percent.Last year's costs are below.
 
Calculate the future total cost assuming 100 patients are expected each month.

Accepted Answer

A) $25,000 
B) $29,000 
C) $20,500 
D) $20,000 
A) $25,000 
B) $29,000 
C) $20,500 
D) $20,000

Question 3

Use this information to answer the following question(s):
The following output of overhead on direct labor hours was obtained using regression analysis:

The company is planning to operate at a level that would call for 3,000 direct labor hours to be utilized for the coming year.
Refer to the above data;use the regression output to write out the overhead cost equation.

Accepted Answer

TC = $10,0

Question 4

Explain the costs,benefits,and weaknesses of the various cost estimation methods.

Accepted Answer

A simplifying assumption is that cost be

Question 5

The method of cost estimation which studies the physical relation between the quantities of inputs and output is known as:

Accepted Answer

A) regression. 
B) account analysis. 
C) engineering methods. 
D) All of the answers are correct. 
A) regression. 
B) account analysis. 
C) engineering methods. 
D) All of the answers are correct.

Question 6

When graphing cost behavior,each point best represents one pair of:

Accepted Answer

A) Revenue and activity values. 
B) Fixed cost and revenue values. 
C) Variable cost and revenue values. 
D) Cost and activity values. 
A) Revenue and activity values. 
B) Fixed cost and revenue values. 
C) Variable cost and revenue values. 
D) Cost and activity values.

Question 7

Which of the following is a weakness of the account analysis 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 8

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.Which of the following terms best describes the equation?

Accepted Answer

A) parabolic. 
B) curvilinear. 
C) linear. 
D) probabilistic. 
A) parabolic. 
B) curvilinear. 
C) linear. 
D) probabilistic.

Question 9

Which of the following is a statistical method that estimates the relation between cost drivers and costs?

Accepted Answer

A) regression analysis. 
B) account analysis. 
C) engineering methods. 
D) All of the answers are correct. 
A) regression analysis. 
B) account analysis. 
C) engineering methods. 
D) All of the answers are correct.

Question 10

The total cost (TC)of an item is calculated as TC = F + VX.Which is the cost driver rate?

Accepted Answer

A) TC 
B) F 
C) V 
D) X 
A) TC 
B) F 
C) V 
D) X

Question 11

Another terms for engineered costs is:

Accepted Answer

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

Question 12

Which of the following represents costs that have both a fixed and variable component?

Accepted Answer

A) curvilinear variable. 
B) curvilinear fixed. 
C) semi-variable. 
D) semi-fixed. 
A) curvilinear variable. 
B) curvilinear fixed. 
C) semi-variable. 
D) semi-fixed.

Question 13

Bluestone Company is planning to expand its warehouse distribution center.Variable costs will increase 5% and fixed costs will increase 20%.Last year's costs are below.
 
Calculate the future total cost assuming 1,000 units are shipped each month.

Accepted Answer

A) $74,000 
B) $72,500 
C) $75,000 
D) $76,500 
A) $74,000 
B) $72,500 
C) $75,000 
D) $76,500

Question 14

Analysts use which of the following method(s)of cost estimation for decision-making?

Accepted Answer

A) Statistical regression analysis. 
B) Account analysis. 
C) Engineering estimation. 
D) All of the answers are correct. 
A) Statistical regression analysis. 
B) Account analysis. 
C) Engineering estimation. 
D) All of the answers are correct.

Question 15

Costs that do not change with changes in activity levels are known as:

Accepted Answer

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

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 above equation was probably found through the use of which of the following mathematical techniques?

Accepted Answer

A) Linear programming 
B) Multiple regression analysis 
C) Simple Regression analysis 
D) Dynamic programming 
A) Linear programming 
B) Multiple regression analysis 
C) Simple Regression analysis 
D) Dynamic programming

Question 17

Which statement is true concerning mixed costs?

Accepted Answer

A) Mixed costs have both fixed and random components. 
B) Mixed costs have both random and variable components. 
C) Mixed costs have both fixed and variable components. 
D) Mixed costs have either fixed or variable components. 
A) Mixed costs have both fixed and random components. 
B) Mixed costs have both random and variable components. 
C) Mixed costs have both fixed and variable components. 
D) Mixed costs have either fixed or variable components.

Question 18

Which statement is true concerning capacity costs?

Accepted Answer

A) Capacity costs are certain fixed costs that provide a firm with the capacity to produce or sell or both. 
B) Capacity costs need not be incurred in the short run to conduct business. 
C) Capacity costs are uncontrollable in the long run. 
D) Capacity costs are always non-value added. 
A) Capacity costs are certain fixed costs that provide a firm with the capacity to produce or sell or both. 
B) Capacity costs need not be incurred in the short run to conduct business. 
C) Capacity costs are uncontrollable in the long run. 
D) Capacity costs are always non-value added.

Question 19

Crimson Electronics produces high-end speakers that sell for $1,300.During April,total operating expenses were:
   
Required:
a.Use account analysis to determine fixed cost per month and variable cost per TV.
b.Project total cost for May assuming production and sales of 180 units.
c.What is the contribution margin per TV?
d.Estimate total profit assuming production and sales of 180 units.

Accepted Answer

a.Variable costs
 @#IMG-DLM&_TB2144_00 Fixed costs

Question 20

Some data-recording method(s)could lead the analyst astray because they can make the data appear to exhibit incorrect cost behavior patterns;for example,

Accepted Answer

A) "unitizing" fixed costs. 
B) firms sometimes do maintenance only when activity is slow. 
C) firms peg advertising expenditures as a percentage of actual sales. 
D) All of the answers are correct. 
A) "unitizing" fixed costs. 
B) firms sometimes do maintenance only when activity is slow. 
C) firms peg advertising expenditures as a percentage of actual sales. 
D) All of the answers are correct.

The total cost (TC)of an item is calculated as TC = F + VX,where X is the

Columbia Hospital for Women is planning to expand its labor and delivery room facilities.Although variable costs per patient will remain unchanged,fixed costs will increase by 20 percent.Last year's costs are below. Calculate the future total cost assuming 100 patients are expected each month.

Explain the costs,benefits,and weaknesses of the various cost estimation methods.

The method of cost estimation which studies the physical relation between the quantities of inputs and output is known as:

When graphing cost behavior,each point best represents one pair of:

Which of the following is a weakness of the account analysis method of cost estimation?

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.Which of the following terms best describes the equation?

Which of the following is a statistical method that estimates the relation between cost drivers and costs?

The total cost (TC)of an item is calculated as TC = F + VX.Which is the cost driver rate?

Another terms for engineered costs is:

Which of the following represents costs that have both a fixed and variable component?

Bluestone Company is planning to expand its warehouse distribution center.Variable costs will increase 5% and fixed costs will increase 20%.Last year's costs are below. Calculate the future total cost assuming 1,000 units are shipped each month.

Analysts use which of the following method(s)of cost estimation for decision-making?

Costs that do not change with changes in activity levels are known as:

Which statement is true concerning mixed costs?

Which statement is true concerning capacity costs?

Some data-recording method(s)could lead the analyst astray because they can make the data appear to exhibit incorrect cost behavior patterns;for example,

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

The total cost (TC)of an item is calculated as TC = F + VX,where X is the

Columbia Hospital for Women is planning to expand its labor and delivery room facilities.Although variable costs per patient will remain unchanged,fixed costs will increase by 20 percent.Last year's costs are below. Calculate the future total cost assuming 100 patients are expected each month.

Explain the costs,benefits,and weaknesses of the various cost estimation methods.

The method of cost estimation which studies the physical relation between the quantities of inputs and output is known as:

When graphing cost behavior,each point best represents one pair of:

Which of the following is a weakness of the account analysis method of cost estimation?

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.Which of the following terms best describes the equation?

Which of the following is a statistical method that estimates the relation between cost drivers and costs?

The total cost (TC)of an item is calculated as TC = F + VX.Which is the cost driver rate?

Another terms for engineered costs is:

Which of the following represents costs that have both a fixed and variable component?

Bluestone Company is planning to expand its warehouse distribution center.Variable costs will increase 5% and fixed costs will increase 20%.Last year's costs are below. Calculate the future total cost assuming 1,000 units are shipped each month.

Analysts use which of the following method(s)of cost estimation for decision-making?

Costs that do not change with changes in activity levels are known as:

Which statement is true concerning mixed costs?

Which statement is true concerning capacity costs?

Some data-recording method(s)could lead the analyst astray because they can make the data appear to exhibit incorrect cost behavior patterns;for example,

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