Exam 2: Cost Concepts, Behaviour, and Estimation

Which of the following is an alternative name for a cost driver in a regression analysis?

Traceability can be used as a criterion to differentiate direct and indirect costs.

Paula's Kennels is located in a small city in Nova Scotia. The company employs three pet attendants, four pet groomers, and two front office staff who book appointments and keep records. The Kennel provides a range of services for dogs and cats including boarding, grooming, and obedience training. The grooming area includes a small retail section that carries dog and cat food, pet supplies, and toys. Assume Paula's Kennels is currently boarding ten pets. The cost of food to board one more pet is best described as a:

Regression analysis is classified as simple or multiple, depending upon the number of dependent variables to be estimated.

Steel used in the production of automobiles would generally be classified as a direct cost.

Which of the following is not an assumption of linear regression analysis?

A learning curve is the rate at which:

Consider the following cost data for the cost object; number of machine setups. Each set of costs (A, B, and C) is from a different type of manufacturing operation and represents the cost behaviour for the cost of that company's machine setups. Number of Machine Setups Cost A Cost Cost 0 \ 5 \ 80 \ 5 10 20 79 37 20 40 82 66 30 60 78 91 40 80 81 123 50 100 79 154 $\text { Cost } \mathrm{C} \text { is best described as: }$

Paula's Kennels is located in a small city in Nova Scotia. The company employs three pet attendants, four pet groomers, and two front office staff who book appointments and keep records. The Kennel provides a range of services for dogs and cats including boarding, grooming, and obedience training. The grooming area includes a small retail section that carries dog and cat food, pet supplies, and toys. If the cost object is cost per day of boarding, which of the following is a direct cost?

Which of the following is the most valid criticism of the high-low method?

In a regression analysis for estimating a cost function, the adjusted R-Square statistic provides information about:

The relevant range in cost accounting is the range over which:

Estimates of future costs can be used in budgeting.

A scatter plot provides helpful information about the relationship between a cost and a potential cost driver.

Preparing a scatter plot is a requirement before applying the two-point method of cost estimation.

Categorizing costs by their behaviour is one step in estimating relevant costs for a cost object.

Smith Company is attempting to develop the cost function for repair costs. The following past data are available: Machine Hours Repair Costs 4,800 \ 6,385 3,400 4,585 4,000 5,285 5,900 7,085 Using the high-low method, what is the estimated repair cost for 4,500 machine hours?

Which of the following are forms of regression analysis?

If you create a scatter plot of a cost against a cost driver:

After estimating a past cost function, managers: I. May need to update it for future changes. II. Have all of the information they need to predict future costs III. May or may not use it to estimate future costs.