Question 1

Using the high-low method of analysis, the estimated total fixed cost per month for maintenance is closest to:

Accepted Answer

A) $440 
B) $407 
C) $470 
D) $0 
A) $440 
B) $407 
C) $470 
D) $0 B

Question 2

CPE for CPAs, Inc., provides continuing professional education for certified public accountants. The company is relatively new and management is seeking information regarding the company's cost structure. The following information has been gathered for the first six months of the current year:   Required:
a. Using the high-low method, estimate the variable cost per seminar and the total fixed cost per month.
b. Using the least-squares regression method, estimate the variable cost per seminar and the total fixed cost per month.

Accepted Answer

a. High-Low Method   Variable cost = Change in cost ÷ Change in activity
Variable cost = $6,600 ÷ 8 seminars = $825 per seminar
Fixed cost = Total cost - Variable cost
Fixed cost = $21,800 - (16 seminars × $825 per seminar) = $8,600
Y = $8,600 + $825X
b. Least-squares regression method
Using Microsoft Excel functions, the estimates are:
Variable cost per seminar = Slope = $9,000
Total fixed cost per month = Intercept = $800
Y = $9,000 + $800X

Question 3

Using the least-squares regression method, the estimated variable cost per labor hour for maintenance is closest to:

Accepted Answer

A) $1.88 
B) $1.52 
C) $1.09 
D) $1.96 
A) $1.88 
B) $1.52 
C) $1.09 
D) $1.96 C

Question 4

Escalona Printing Corp., a book printer, has provided the following data:   Management believes that the press setup cost is a mixed cost that depends on the number of titles printed. (A specific book that is to be printed is called a "title". Typically, thousands of copies will be printed of each title. Specific steps must be taken to setup the presses for printing each title-for example, changing the printing plates. The costs of these steps are the press setup costs.)
Required:
Estimate the variable cost per title printed and the fixed cost per month using the least-squares regression method.

Accepted Answer

The solution using Microsoft Excel funct

Question 5

Using the least-squares regression method, the estimate of the variable component of maintenance cost per machine-hour is closest to:

Accepted Answer

A) $1.85 
B) $10.30 
C) $1.67 
D) $1.90 
A) $1.85 
B) $10.30 
C) $1.67 
D) $1.90

Question 6

The management of Buff Sports Stadium believes that the number of sporting events each month is an measure of activity for total clean-up cost. Shown below are event figures and total clean up costs for the past four months:   Required:
a. Estimate Buff's cost formula for monthly clean-up cost using the high-low method.
b. Estimate Buff's cost formula for monthly clean-up cost using the least-squares regression method.

Accepted Answer

a. @#IMG-DLM& Variable cost = Change in cost ÷ Cha

Question 7

Below are cost and activity data for a particular cost over the last four periods. Your boss has asked you to analyze this cost so that management will have a better understanding of how this cost changes in response to changes in activity.   Required:
Using the least-squares regression method, estimate the cost formula for this cost.

Accepted Answer

The solution using Microsoft Excel funct

Question 8

Using the least-squares regression method, the estimate of the fixed component of maintenance cost per month is closest to:

Accepted Answer

A) $6,066 
B) $7,244 
C) $5,944 
D) $7,130 
A) $6,066 
B) $7,244 
C) $5,944 
D) $7,130

Question 9

Your boss would like you to estimate the fixed and variable components of a particular cost. Actual data for this cost over four recent periods appear below.   Using the least-squares regression method, what is the cost formula for this cost?

Accepted Answer

A) Y = $0.00 + $7.55X 
B) Y = $110.44 + $2.70X 
C) Y = $103.38 + $3.00X 
D) Y = $113.35 + $0.89X 
A) Y = $0.00 + $7.55X 
B) Y = $110.44 + $2.70X 
C) Y = $103.38 + $3.00X 
D) Y = $113.35 + $0.89X

Question 10

Using the least-squares regression method, the estimate of the variable component of inspection cost per unit produced is closest to:

Accepted Answer

A) $5.40 
B) $5.33 
C) $5.43 
D) $16.07 
A) $5.40 
B) $5.33 
C) $5.43 
D) $16.07

Question 11

When analyzing a mixed cost, you should always plot the data in a scattergraph, but it is particularly important to check the data visually on a scattergraph when the R2 from a least squares regression is low. A quick look at the scattergraph can reveal that there is little relation between the cost and the activity or that the relation is something other than a simple straight line.

Accepted Answer

A) True 
 B)False

Question 12

Using the high-low method of analysis, the estimated variable cost per labor hour for maintenance is closest to:

Accepted Answer

A) $0.83 
B) $1.84 
C) $1.30 
D) $1.14 
A) $0.83 
B) $1.84 
C) $1.30 
D) $1.14

Question 13

Laborn Inc.'s inspection costs are listed below:   Management believes that inspection cost is a mixed cost that depends on the number of units produced. Using the least-squares regression method, the estimates of the variable and fixed components of inspection cost would be closest to:

Accepted Answer

A) $43.04 per unit plus $10,648 per month 
B) $34.63 per unit plus $2,089 per month 
C) $34.78 per unit plus $2,044 per month 
D) $36.00 per unit plus $1,714 per month 
A) $43.04 per unit plus $10,648 per month 
B) $34.63 per unit plus $2,089 per month 
C) $34.78 per unit plus $2,044 per month 
D) $36.00 per unit plus $1,714 per month

Question 14

The management of Sambrano Corporation would like to better understand the behavior of the company's warranty costs. Those costs are listed below for a number of recent months:   Management believes that warranty cost is a mixed cost that depends on the number of product returns.
Required:
Estimate the variable cost per product return and the fixed cost per month using the least-squares regression method.

Accepted Answer

The solution using Microsoft Excel funct

Question 15

Using the least-squares regression equation, the total maintenance cost for March is:

Accepted Answer

A) above the regression line. 
B) on the regression line. 
C) below the regression line. 
D) outside the relevant range. 
A) above the regression line. 
B) on the regression line. 
C) below the regression line. 
D) outside the relevant range.

Question 16

_________________ is a method of separating a mixed cost into its fixed and variable elements by fitting a line to the data that minimizes the sum of the squared errors.

Accepted Answer

A) Account analysis 
B) Scattergraph 
C) High-low 
D) Least-square regression 
A) Account analysis 
B) Scattergraph 
C) High-low 
D) Least-square regression

Question 17

Sablan Inc. maintains a call center to take orders, answer questions, and handle complaints. The costs of the call center for a number of recent months are listed below:   Management believes that the cost of the call center is a mixed cost that depends on the number of calls taken.
Required:
Estimate the variable cost per call and fixed cost per month using the least-squares regression method.

Accepted Answer

Using Microsoft Excel function

Question 18

The management of Bandle Corporation would like for you to analyze their repair costs, which are listed below:   Management believes that repair cost is a mixed cost that depends on the number of machine-hours. Using the least-squares regression method, the estimates of the variable and fixed components of repair cost would be closest to:

Accepted Answer

A) $6.72 per machine-hour plus $55,230 per month 
B) $6.80 per machine-hour plus $54,679 per month 
C) $7.28 per machine-hour plus $51,389 per month 
D) $14.66 per machine-hour plus $101,993 per month 
A) $6.72 per machine-hour plus $55,230 per month 
B) $6.80 per machine-hour plus $54,679 per month 
C) $7.28 per machine-hour plus $51,389 per month 
D) $14.66 per machine-hour plus $101,993 per month

Question 19

Using the least-squares regression method, the estimate of the fixed component of inspection cost per month is closest to:

Accepted Answer

A) $6,983 
B) $10,342 
C) $10,527 
D) $6,972 
A) $6,983 
B) $10,342 
C) $10,527 
D) $6,972

Question 20

Using the least-squares regression method, the estimated total fixed cost per month for maintenance is closest to:

Accepted Answer

A) $470 
B) $416 
C) $400 
D) $378 
A) $470 
B) $416 
C) $400 
D) $378

Using the high-low method of analysis, the estimated total fixed cost per month for maintenance is closest to:

Using the least-squares regression method, the estimated variable cost per labor hour for maintenance is closest to:

Using the least-squares regression method, the estimate of the variable component of maintenance cost per machine-hour is closest to:

Using the least-squares regression method, the estimate of the fixed component of maintenance cost per month is closest to:

Your boss would like you to estimate the fixed and variable components of a particular cost. Actual data for this cost over four recent periods appear below. Using the least-squares regression method, what is the cost formula for this cost?

Using the least-squares regression method, the estimate of the variable component of inspection cost per unit produced is closest to:

Using the high-low method of analysis, the estimated variable cost per labor hour for maintenance is closest to:

Laborn Inc.'s inspection costs are listed below: Management believes that inspection cost is a mixed cost that depends on the number of units produced. Using the least-squares regression method, the estimates of the variable and fixed components of inspection cost would be closest to:

Using the least-squares regression equation, the total maintenance cost for March is:

_________________ is a method of separating a mixed cost into its fixed and variable elements by fitting a line to the data that minimizes the sum of the squared errors.

Using the least-squares regression method, the estimate of the fixed component of inspection cost per month is closest to:

Using the least-squares regression method, the estimated total fixed cost per month for maintenance is closest to:

Managerial Accounting and Cost Concepts

Cost of Quality

Job-Order Costing

Activity-Based Absorption Costing

The Predetermined Overhead Rate and Capacity

Process Costing

Fifo Method

Service Department Allocations

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Super-Variable Costing

Activity-Based Costing: a Tool to Aid Decision Making

Abc Action Analysis

Filters

Exam 2: Least-Squares Regression Computations

Using the high-low method of analysis, the estimated total fixed cost per month for maintenance is closest to:

Using the least-squares regression method, the estimated variable cost per labor hour for maintenance is closest to:

Using the least-squares regression method, the estimate of the variable component of maintenance cost per machine-hour is closest to:

Using the least-squares regression method, the estimate of the fixed component of maintenance cost per month is closest to:

Your boss would like you to estimate the fixed and variable components of a particular cost. Actual data for this cost over four recent periods appear below. Using the least-squares regression method, what is the cost formula for this cost?

Using the least-squares regression method, the estimate of the variable component of inspection cost per unit produced is closest to:

Using the high-low method of analysis, the estimated variable cost per labor hour for maintenance is closest to:

Laborn Inc.'s inspection costs are listed below: Management believes that inspection cost is a mixed cost that depends on the number of units produced. Using the least-squares regression method, the estimates of the variable and fixed components of inspection cost would be closest to:

Using the least-squares regression equation, the total maintenance cost for March is:

_________________ is a method of separating a mixed cost into its fixed and variable elements by fitting a line to the data that minimizes the sum of the squared errors.

Using the least-squares regression method, the estimate of the fixed component of inspection cost per month is closest to:

Using the least-squares regression method, the estimated total fixed cost per month for maintenance is closest to:

Managerial Accounting and Cost Concepts

Cost of Quality

Job-Order Costing

Activity-Based Absorption Costing

The Predetermined Overhead Rate and Capacity

Process Costing

Fifo Method

Service Department Allocations

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Super-Variable Costing

Activity-Based Costing: a Tool to Aid Decision Making

Abc Action Analysis

Filters