Question 1

________ is a simple method for measuring a linear cost function from past cost data, focusing on two representative points.

Accepted Answer

A)  Engineering analysis 
B)  Account analysis 
C)  The high-low method 
D)  The least-squares regression method 
A)  Engineering analysis 
B)  Account analysis 
C)  The high-low method 
D)  The least-squares regression method

Question 2

Costs determined by management as part of the periodic planning process in order to meet the organization's goals.

Accepted Answer

Discretion

Question 3

The following three data points appear to be

Accepted Answer

A)  a variable cost. 
B)  a mixed cost. 
C)  a fixed cost. 
D)  a step cost. 
A)  a variable cost. 
B)  a mixed cost. 
C)  a fixed cost. 
D)  a step cost.

Question 4

Costs arising from the possession of facilities, equipment, and a basic organization: large, indivisible chunks of cost that the organization is obligated to incur or usually would not consider avoiding.

Accepted Answer

Committed

Question 5

Use the following information to answer the next question(s).
The following information was collected regarding maintenance costs at different activity levels measured in machine hours:
  
-Using the cost formula developed under the high-low method, what would be the estimate of maintenance costs if 13,000 machine hours are scheduled for next month

Accepted Answer

A)  $650,000. 
B)  $950,000. 
C)  $850,000. 
D)  $882,000. 
A)  $650,000. 
B)  $950,000. 
C)  $850,000. 
D)  $882,000.

Question 6

The Arnott Company incurred the following maintenance costs during the past six months:   a. The two points that seem to best represent the relationship between cost and activity are the activity levels of 100,000 and 140,000 machine hours. Using these two points, estimate the fixed and variable components of maintenance costs.
b. Develop a cost function that the Arnott Company can use to estimate maintenance cost at different volume levels.
c. Estimate maintenance cost for July if the company expects to use 110,000 machine hours.

Accepted Answer

a. Variable Cost Per Machine Hours = Dif

Question 7

________ measures cost behaviour according to what costs should be, NOT by what costs have been.

Accepted Answer

A)  Engineering analysis 
B)  Account analysis 
C)  The high-low method 
D)  The least-squares regression method 
A)  Engineering analysis 
B)  Account analysis 
C)  The high-low method 
D)  The least-squares regression method

Question 8

Which symbol in the mixed-cost function, Y = F + VX, represents the slope?

Accepted Answer

A)  V 
B)  F 
C)  X 
D)  Y 
A)  V 
B)  F 
C)  X 
D)  Y

Question 9

Which method of approximating cost functions does NOT involve the analysis of past costs?

Accepted Answer

A)  High-low analysis 
B)  Visual-fit analysis 
C)  Engineering analysis 
D)  Simple least-squares regression 
A)  High-low analysis 
B)  Visual-fit analysis 
C)  Engineering analysis 
D)  Simple least-squares regression

Question 10

________ is the first step in estimating or predicting costs as a function of appropriate cost drivers.

Accepted Answer

A)  Cost measurement 
B)  Cost determination 
C)  Cost behaviour 
D)  Cost driver 
A)  Cost measurement 
B)  Cost determination 
C)  Cost behaviour 
D)  Cost driver

Question 11

An example of a volume-driven cost in a book publishing enterprise is

Accepted Answer

A)  wages of editorial staff. 
B)  paper and ink. 
C)  rent on the factory. 
D)  accounts payable clerk's wages. 
A)  wages of editorial staff. 
B)  paper and ink. 
C)  rent on the factory. 
D)  accounts payable clerk's wages.

Question 12

The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service.

Accepted Answer

The answer of The process of identifying appropriate cost drivers...

Question 13

Costs that change abruptly at intervals of activity because the resources and their costs come in indivisible chunks are called

Accepted Answer

A)  mixed costs. 
B)  variable costs. 
C)  fixed costs. 
D)  step costs. 
A)  mixed costs. 
B)  variable costs. 
C)  fixed costs. 
D)  step costs.

Question 14

The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service is called

Accepted Answer

A)  cost prediction. 
B)  cost measurement. 
C)  activity analysis. 
D)  budgeting. 
A)  cost prediction. 
B)  cost measurement. 
C)  activity analysis. 
D)  budgeting.

Question 15

Engineering cost analysis

Accepted Answer

A)  measures cost behaviour according to what cost should be. 
B)  measures cost behaviour according to what costs have been. 
C)  involves very little cost to perform. 
D)  is accurate and timely. 
A)  measures cost behaviour according to what cost should be. 
B)  measures cost behaviour according to what costs have been. 
C)  involves very little cost to perform. 
D)  is accurate and timely.

Question 16

Kilson Dental Centre currently charges $20 per dental exam. A new company that recently located near the dental centre asked if the dental centre would be interested in providing dental services to their employees at a special rate of $15 per dental exam.
The dentists have agreed to offer the dental exams at the reduced fee if the $15 would cover the variable costs of the dental exam.
The dental centre's accountant provided the following information about dental exams during the first six months of the year:   a. Using the least squares method, determine the variable cost per dental exam.
b. Will the $15 reduced fee cover the dental centre's variable cost of providing the dental exam?
c. Develop a cost function that can be used to estimate total exam costs at different activity levels.
d. If a total of 200 exams are expected to be performed in July, what would be the total expected cost of performing the 200 exams?
e. If 50 additional exams are performed each month at the special rate, what would be the incremental revenue resulting from the 50 exams?
f. What would be the incremental cost of providing the 50 exams?
g. What would be the incremental profit that would result from providing the 50 exams at the reduced rate?

Accepted Answer

a. @#IMG-DLM& The slope of the regressio

Question 17

Activity analysis is the process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service.

Accepted Answer

A) True 
 B)False

________ is a simple method for measuring a linear cost function from past cost data, focusing on two representative points.

Costs determined by management as part of the periodic planning process in order to meet the organization's goals.

The following three data points appear to be

Costs arising from the possession of facilities, equipment, and a basic organization: large, indivisible chunks of cost that the organization is obligated to incur or usually would not consider avoiding.

________ measures cost behaviour according to what costs should be, NOT by what costs have been.

Which symbol in the mixed-cost function, Y = F + VX, represents the slope?

Which method of approximating cost functions does NOT involve the analysis of past costs?

________ is the first step in estimating or predicting costs as a function of appropriate cost drivers.

An example of a volume-driven cost in a book publishing enterprise is

The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service.

Costs that change abruptly at intervals of activity because the resources and their costs come in indivisible chunks are called

The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service is called

Engineering cost analysis

Activity analysis is the process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service.

Management Accounting and Management Decisions

Cost Behaviour and Cost-Volume Relationships

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

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Exam 3: Measurement of Cost Behaviour

________ is a simple method for measuring a linear cost function from past cost data, focusing on two representative points.

Costs determined by management as part of the periodic planning process in order to meet the organization's goals.

The following three data points appear to be

Costs arising from the possession of facilities, equipment, and a basic organization: large, indivisible chunks of cost that the organization is obligated to incur or usually would not consider avoiding.

________ measures cost behaviour according to what costs should be, NOT by what costs have been.

Which symbol in the mixed-cost function, Y = F + VX, represents the slope?

Which method of approximating cost functions does NOT involve the analysis of past costs?

________ is the first step in estimating or predicting costs as a function of appropriate cost drivers.

An example of a volume-driven cost in a book publishing enterprise is

The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service.

Costs that change abruptly at intervals of activity because the resources and their costs come in indivisible chunks are called

The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service is called

Engineering cost analysis

Activity analysis is the process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service.

Management Accounting and Management Decisions

Cost Behaviour and Cost-Volume Relationships

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

Filters