Exam 3: Cost Behaviour, Cost Drivers and Cost Estimation

Assume the costs of a service department are driven by the number of service orders and the equation for calculating the costs of a service department is y = $5000 + $3x. The cost of the department if there were 6000 orders would be $25 000.

A manufacturer plans to increase production within the relevant range of activity. What behaviour can the company expect for each of the following?

Yang Manufacturing makes a product called Yin. The relevant range of operations is between 2500 units and 10 000 units of Yin per month. Per unit costs at two activity levels are as follows: 5000 units at $17.00 per unit; 7500 units at $13.00 per unit. Determine the cost formula that expresses the behaviour of Yang's total costs:

Which of the following would always be a mixed (semivariable) cost for a firm?

In activity-based costing analysis, package design is classified as a:

The results of the regression analysis to estimate delivery costs are as follows: Which of the following is an appropriate cost equation based on the above regression output?

The variable costs per unit are $4 when a company makes 10 000 units. What are the per unit variable costs when 8000 units are produced?

Economic plausibility is one of the criteria used to evaluate a particular regression line.

Yang Manufacturing makes a product called Yin. The relevant range of operations is between 2500 units and 10 000 units of Yin per month. Per unit costs at two activity levels are as follows: 5000 units at $17.00 per unit; 7500 units at $13.00 per unit. Determine their total cost if Yang produces 10 000 units.

In activity-based costing analysis, set-up costs are classified as a:

The relevant range is that range of activity where:

Regression analysis is a superior statistical method to the high-low method because it utilises all data when determining the line of best fit.

Within the relevant range, a curvilinear cost function can be graphed as a:

Which of the following is not an example of a cost driver for a delivery truck?

Direct labour hours would be described as a volume-based cost driver for a clothing manufacturer.

To test the significance of a result using the regression equation as a whole and to assess that the result is not due to random factors, management would consider the result of the

Which of the following are problems frequently encountered in data collection?

In activity-based costing analysis, the manufacturing manager's salary is classified as a:

An example of a discretionary cost for a firm that manufactures furniture is:

Which of the following is an example of an engineered cost?