Question 1

Variable costing considers fixed manufacturing costs as inventoriable product costs.

Accepted Answer

A) True 
 B)False

Question 2

Outliers are abnormal data points.

Accepted Answer

A) True 
 B)False

Question 3

If a manager sees a potential outlier in the data, he or she should first determine whether the data is correct.

Accepted Answer

A) True 
 B)False

Question 4

What are three methods used to estimate cost behavior? What are the advantages and disadvantages of each method?

Accepted Answer

The answer of What are three methods used to estimate...

Question 5

Which type of cost behavior is indicated by the following graphs?

Accepted Answer

A) Step 
B) Fixed 
C) Curvilinear 
D) Variable 
A) Step 
B) Fixed 
C) Curvilinear 
D) Variable

Question 6

The R-squared statistic determined by regression analysis is sometimes referred to as the "goodness-of-fit" statistic.

Accepted Answer

A) True 
 B)False

Question 7

Jones Ice Cream Stand is operated by Mr. Jones and experiences different sales patterns throughout the year. To plan for the future, Mr. Jones wants to determine its cost behavior patterns. He has the following information available about the ice cream stand's operating costs and the number of soft serve cones served.   Using the high-low method, the fixed costs for a month are

Accepted Answer

A) $ 300. 
B) $2,200. 
C) $ 500. 
D) $ 750. 
A) $ 300. 
B) $2,200. 
C) $ 500. 
D) $ 750.

Question 8

What term represents the total cost in the equation: y = vx + f?

Accepted Answer

A) f 
B) v 
C) vx 
D) y 
A) f 
B) v 
C) vx 
D) y

Question 9

Wallace Incorporated wanted to determine the relationship between its monthly operating costs and a potential cost driver, machine hours. The output of a regression analysis showed the following information (note: only a portion of the regression analysis results is presented here):   What is the variable cost per machine hour (rounded to the nearest cent)?

Accepted Answer

A) $67.59 
B) $2,945.95 
C) $0.99 
D) $0.72 
A) $67.59 
B) $2,945.95 
C) $0.99 
D) $0.72

Question 10

Schrute Farm Sales buys portable generators for $450 and sells them for $720. He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays $2,000 a month rent for his store, and also pays $1,700 a month to his staff in addition to the commissions. Mr. Schrute sold 200 generators in June. If Mr. Schrute prepares a traditional income statement for the month of June, what would be his gross profit?

Accepted Answer

A) $234,000 
B) $144,000 
C) $90,000 
D) $54,000 
A) $234,000 
B) $144,000 
C) $90,000 
D) $54,000

Question 11

George Company has a relevant range of 150,000 units to 400,000 units. The company has total fixed costs of $525,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The variable cost per unit at 300,000 units is

Accepted Answer

A) $3.00. 
B) $0.29. 
C) $0.50. 
D) $3.50. 
A) $3.00. 
B) $0.29. 
C) $0.50. 
D) $3.50.

Question 12

Stanley's Bicycles store buys bicycles on average for $600 and sells them on average for $750. He pays a sales commission of 15% of sales revenue to his sales staff. Stanley pays $1,400 a month rent for his store, and also pays $3,000 a month to his staff in addition to the commissions. Stanley sold 120 bicycles in June. If Stanley prepares a contribution margin income statement for the month of June, what would be his operating income?

Accepted Answer

A) $8,900 
B) $90,000 
C) $85,500 
D) $100 
A) $8,900 
B) $90,000 
C) $85,500 
D) $100

Question 13

Tasty Treats is a snow cone stand near the local park. To plan for the future, it wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served.   Using the high-low method, the monthly operating costs-if Sunny sells 8,000 snow cones in a month-are

Accepted Answer

A) $7,100. 
B) $5,600. 
C) $10,920. 
D) $1,500. 
A) $7,100. 
B) $5,600. 
C) $10,920. 
D) $1,500.

Question 14

The income statement is organized by ________ under absorption costing.

Accepted Answer

A) period costs only 
B) fixed costs only 
C) variable costs only 
D) product and period costs 
A) period costs only 
B) fixed costs only 
C) variable costs only 
D) product and period costs

Question 15

The representation for total variable costs is

Accepted Answer

A) vx + f. 
B) vx. 
C) vx - f. 
D) y = vx + f. 
A) vx + f. 
B) vx. 
C) vx - f. 
D) y = vx + f.

Question 16

A "perfect" straight line would render an R-square value of 1.00.

Accepted Answer

A) True 
 B)False

Question 17

If inventory has declined, operating income will be higher under absorption costing than it is under variable costing.

Accepted Answer

A) True 
 B)False

Question 18

On a regression analysis output generated with Excel, the slope of a mixed cost line is represented by the ________.

Accepted Answer

A) x variable 1 coefficient 
B) intercept coefficient 
C) R-square 
D) residual 
A) x variable 1 coefficient 
B) intercept coefficient 
C) R-square 
D) residual

Question 19

Which of the following statements is true concerning income if production exceeds units sold?

Accepted Answer

A) A higher operating income will result under a variable costing income statement. 
B) A lower operating income will result under an absorption costing income statement. 
C) A higher operating income will result under an absorption costing income statement. 
D) The same operating income will result under both a variable costing and absorption costing income statement. 
A) A higher operating income will result under a variable costing income statement. 
B) A lower operating income will result under an absorption costing income statement. 
C) A higher operating income will result under an absorption costing income statement. 
D) The same operating income will result under both a variable costing and absorption costing income statement.

Question 20

It costs Homer's Manufacturing $0.75 to produce baseballs and Homer sells them for $4.00 a piece. Homer pays a sales commission of 5% of sales revenue to his sales staff. Homer also pays $12,000 a month rent for his factory and store, and also pays $75,000 a month to his staff in addition to the commissions. Homer sold 67,500 baseballs in June. If Homer prepares a traditional income statement for the month of June, what would be his gross profit?

Accepted Answer

A) $320,625 
B) $219,375 
C) $270,000 
D) $50,625 
A) $320,625 
B) $219,375 
C) $270,000 
D) $50,625

Variable costing considers fixed manufacturing costs as inventoriable product costs.

Outliers are abnormal data points.

If a manager sees a potential outlier in the data, he or she should first determine whether the data is correct.

What are three methods used to estimate cost behavior? What are the advantages and disadvantages of each method?

Which type of cost behavior is indicated by the following graphs?

The R-squared statistic determined by regression analysis is sometimes referred to as the "goodness-of-fit" statistic.

What term represents the total cost in the equation: y = vx + f?

George Company has a relevant range of 150,000 units to 400,000 units. The company has total fixed costs of $525,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The variable cost per unit at 300,000 units is

The income statement is organized by ________ under absorption costing.

The representation for total variable costs is

A "perfect" straight line would render an R-square value of 1.00.

If inventory has declined, operating income will be higher under absorption costing than it is under variable costing.

On a regression analysis output generated with Excel, the slope of a mixed cost line is represented by the ________.

Which of the following statements is true concerning income if production exceeds units sold?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 6: Cost Behavior

Variable costing considers fixed manufacturing costs as inventoriable product costs.

Outliers are abnormal data points.

If a manager sees a potential outlier in the data, he or she should first determine whether the data is correct.

What are three methods used to estimate cost behavior? What are the advantages and disadvantages of each method?

Which type of cost behavior is indicated by the following graphs?

The R-squared statistic determined by regression analysis is sometimes referred to as the "goodness-of-fit" statistic.

What term represents the total cost in the equation: y = vx + f?

George Company has a relevant range of 150,000 units to 400,000 units. The company has total fixed costs of $525,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The variable cost per unit at 300,000 units is

The income statement is organized by ________ under absorption costing.

The representation for total variable costs is

A "perfect" straight line would render an R-square value of 1.00.

If inventory has declined, operating income will be higher under absorption costing than it is under variable costing.

On a regression analysis output generated with Excel, the slope of a mixed cost line is represented by the ________.

Which of the following statements is true concerning income if production exceeds units sold?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters