Smith Company is attempting to develop the cost function for repair costs. The following past data are available: $\begin{array}{lr}\text { Machine Hours }&\text {Repair Costs }\\ 4,800 & \$ 6,385 \\ 3,400 & 4,585 \\ 4,000 & 5,285 \\ 5,900 & 7,085 \end{array}$ Using the high-low method, what is the variable repair cost per machine hour?

A) $0.15 B) $1.00 C) $4.00 D) $5.00 A) $0.15 B) $1.00 C) $4.00 D) $5.00

A) Activities that cause costs to increase as the activity increases B) Accounting techniques used to control costs C) Accounting measurements used to evaluate whether or not performance is proceeding according to plan D) A mechanical basis, such as machine hours, computer time, size of equipment, or square meters used to assign costs to activities A) Activities that cause costs to increase as the activity increases B) Accounting techniques used to control costs C) Accounting measurements used to evaluate whether or not performance is proceeding according to plan D) A mechanical basis, such as machine hours, computer time, size of equipment, or square meters used to assign costs to activities

Exam 2: Cost Concepts, Behaviour, and Estimation

Managers go through a series of questions to decide whether to use past costs to estimate future costs. Which of the following questions is least likely to be one of them?

(Multiple Choice)

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Question 101

Which one of following is not a reason to take into account the relevant range when estimating a cost?

(Multiple Choice)

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Question 102

The cumulative average-time learning curve can be represented mathematically as:

(Multiple Choice)

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Question 103

Which of the following techniques relies on visual analysis?

(Multiple Choice)

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Question 104

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 Cost A is best described as:

(Multiple Choice)

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Question 105

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. Which of the following is the best example of a discretionary cost for Paula's Kennels?

(Multiple Choice)

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Question 106

Past costs are irrelevant for decision-making and possibly relevant for predicting future costs.

(True/False)

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Question 107

A scatter plot is especially useful when managers wish to:

(Multiple Choice)

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Question 108

In a regression equation, variable costs are represented by the:

(Multiple Choice)

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Question 109

A high adjusted R-square for the regression of a cost against a cost driver indicates:

(Multiple Choice)

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Question 110

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 variable repair cost per machine hour?

(Multiple Choice)

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Question 111

Regression analysis works best when the relationship between costs and cost drivers is:

(Multiple Choice)

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Question 112

Cost drivers are:

(Multiple Choice)

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Question 113

Tom and Mike are installing new flooring in their home. The house has 5 rooms of approximately equal size where the flooring will be replaced. Tom and Mike spent 3 hours removing the old flooring from the first room. The average time to remove the flooring from 2 rooms is 2.25 hours per room. Determine the learning curve percentage experienced by Tom and Mike. Below are values that may be useful in answering this question. (95\%)/(2)=-0.074 (90\%)/(2)=-0.152 (85\%)/(2)=-0.234 (80\%)/(2)=-0.322 (75\%)/(2)=-0.415 (70\%)/(2)=-0.515

(Multiple Choice)

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Question 114

Milano Company has an average overhead cost per hour of $10.50 at 3,500 machine hours, and at 3,000 hours it is $11.25. The company managers wish to estimate the overhead cost function. What is the fixed overhead cost?

(Multiple Choice)

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Question 115

Simple regression analysis output produces a variety of information and statistics. Which of the following statistics provides information for fixed costs?

(Multiple Choice)

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Question 116

The high-low method is a specific application of the two-point method of cost estimation.

(True/False)

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Question 117

Learning curves lead to greater productivity over time.

(True/False)

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Question 118

A regression of total selling expenses against number of units sold yields an intercept of 178,024 and a slope of 12.3. This indicates that:

(Multiple Choice)

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Question 119

Reviewing cost behaviour patterns over time from the accounting records and using that review to predict future costs best describes:

(Multiple Choice)

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Question 120

Showing 101 - 120 of 129

Managers go through a series of questions to decide whether to use past costs to estimate future costs. Which of the following questions is least likely to be one of them?

Which one of following is not a reason to take into account the relevant range when estimating a cost?

The cumulative average-time learning curve can be represented mathematically as:

Which of the following techniques relies on visual analysis?

Past costs are irrelevant for decision-making and possibly relevant for predicting future costs.

A scatter plot is especially useful when managers wish to:

In a regression equation, variable costs are represented by the:

A high adjusted R-square for the regression of a cost against a cost driver indicates:

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 variable repair cost per machine hour?

Regression analysis works best when the relationship between costs and cost drivers is:

Cost drivers are:

Milano Company has an average overhead cost per hour of $10.50 at 3,500 machine hours, and at 3,000 hours it is $11.25. The company managers wish to estimate the overhead cost function. What is the fixed overhead cost?

Simple regression analysis output produces a variety of information and statistics. Which of the following statistics provides information for fixed costs?

The high-low method is a specific application of the two-point method of cost estimation.

Learning curves lead to greater productivity over time.

A regression of total selling expenses against number of units sold yields an intercept of 178,024 and a slope of 12.3. This indicates that:

Reviewing cost behaviour patterns over time from the accounting records and using that review to predict future costs best describes:

The Role of Accounting Information in Ethical Management Decision Making

Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Job Costing

Process Costing

Activity-Based Costing and Management

Measuring and Assigning Support Department Costs

Joint Product and By-Product Costing

Static and Flexible Budgets

Standard Costs and Variance Analysis

Strategic Investment Decisions

Pricing Decisions

Strategic Management of Costs

Measuring and Assigning Costs for Income Statements

Performance Evaluation and Compensation

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