Exam 6: Cost Behavior

Your boss wants you to analyze the relationship between the company's monthly operating costs and the current cost driver she has chosen. You run a regression analysis and receive the following information: Intercept Coefficient = 653,434 X Variable 1 Coefficient = 5.76 R-square = 0.3784 What is your company's monthly cost equation?

The Maple Company has total fixed costs of $400,000. It also has $200,000 in total variable costs. These costs exist at a production level of 100,000 units. The variable cost per unit is

Your client's company wants to determine the relationship between its monthly operating costs and a potential cost driver. The output of regression analysis showed the following information: Intercept Coefficient = 89,500 X Variable 1 Coefficient = 62.50 R-square = 0.9855 What is the company's monthly cost equation?

Regis Corporation wants to know how closely its current cost driver is correlated with its monthly operating costs. The managerial accountant runs a regression analysis using a statistical software program and produces the following data: Intercept Coefficient = 12,200,567 X Variable 1 Coefficient = 95.65 R-square = 0.8574 What is the Regis Corporation's monthly cost equation?

The cost equation determined using the high-low method should be the same as the cost equation determined using regression analysis.

With respect to variable costs per unit, which of the following statements is true?

When performing account analysis, managers decide how to classify each account as a variable, fixed or mixed cost.

For external reporting purposes, U.S. GAAP allows companies to use ________.

Jean's Fitness Club provides monthly memberships as well as personal training sessions. The personal trainers earn 50% of the revenue for all personal training sessions. The Fitness Club also sells nutrition products. Jean's general ledger accounts indicate the following for the year. The front desk staff wages expense remains the same throughout the year. If a traditional income statement is prepared for the year, what is Gross Profit?