Question 1

Mixed costs have both a fixed and a variable component.

Accepted Answer

A) True 
 B)False

Question 2

Match each following terms with their correct description from the items listed below.
-Y-intercept corresponds to the fixed cost

Accepted Answer

A) Committed fixed cost 
B) Discretionary fixed cost 
C) Mixed cost 
D) Step cost 
A) Committed fixed cost 
B) Discretionary fixed cost 
C) Mixed cost 
D) Step cost

Question 3

Refer to Toronto Company. What is the cost formula for electricity cost when using the results of regression?

Accepted Answer

A)  $9.75 × machine hours 
B)  $9.75 + ($2,225 × machine hours) 
C)  $2,225 × machine hours 
D)  $2,225 + ($9.75 × machine hours) 
A)  $9.75 × machine hours 
B)  $9.75 + ($2,225 × machine hours) 
C)  $2,225 × machine hours 
D)  $2,225 + ($9.75 × machine hours)

Question 4

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Depreciation on existing equipment

Accepted Answer

A) Discretionary fixed cost 
B) Committed fixed cost 
A) Discretionary fixed cost 
B) Committed fixed cost

Question 5

Lindsay Company had utilities cost of $105,000 at an output level of 30,000 units. The utilities cost was a mixed cost, and the fixed portion was $60,000. What would be the best estimate of total utilities cost at an output level of 50,000 units?

Accepted Answer

A)  $50,000 
B)  $110,000 
C)  $125,000 
D)  $135,000 
A)  $50,000 
B)  $110,000 
C)  $125,000 
D)  $135,000

Question 6

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Cost of rework, with respect to number of items reworked

Accepted Answer

A) Variable cost 
B) Fixed cost 
A) Variable cost 
B) Fixed cost

Question 7

What is the focus of cost behaviour analysis?

Accepted Answer

A)  the reaction of costs to changes in time 
B)  the reaction of costs to changes in profit 
C)  the reaction of costs to changes in benefit 
D)  the reaction of costs to changes in activity level 
A)  the reaction of costs to changes in time 
B)  the reaction of costs to changes in profit 
C)  the reaction of costs to changes in benefit 
D)  the reaction of costs to changes in activity level

Question 8

Refer to Prince Edward Company. What is the cost formula for maintenance cost when using the result of regression?

Accepted Answer

A)  $9.82 × machine hours 
B)  $985 × machine hours 
C)  $985 + ($9.82 × machine hours) 
D)  ($4,686 - $3,956)/(386 - 310) 
A)  $9.82 × machine hours 
B)  $985 × machine hours 
C)  $985 + ($9.82 × machine hours) 
D)  ($4,686 - $3,956)/(386 - 310)

Question 9

Refer to Drumheller Company. Which element is the independent variable?

Accepted Answer

A)  output 
B)  total cost 
C)  fixed cost 
D)  variable rate 
A)  output 
B)  total cost 
C)  fixed cost 
D)  variable rate

Question 10

Match each following terms with their correct description from the items listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Results in the best-fitting line through a set of data points

Accepted Answer

A) High-low method 
B) Scattergraph method 
C) Least squares (regression) method 
A) High-low method 
B) Scattergraph method 
C) Least squares (regression) method

Question 11

What is characteristic of variable costs within the relevant range?

Accepted Answer

A)  decrease in total as output increases 
B)  stay constant in total as output increases 
C)  decrease on a per unit basis as output increases 
D)  stay constant on a per unit basis as output changes 
A)  decrease in total as output increases 
B)  stay constant in total as output increases 
C)  decrease on a per unit basis as output increases 
D)  stay constant on a per unit basis as output changes

Question 12

Refer to Nova Scotia Accounting Firm. What does "total cost" represent?

Accepted Answer

A)  the intercept 
B)  the variable rate 
C)  the dependent variable 
D)  the independent variable 
A)  the intercept 
B)  the variable rate 
C)  the dependent variable 
D)  the independent variable

Question 13

Refer to Lake Louise Company. What would be the fixed cost of the janitorial services when using the high-low method?

Accepted Answer

A)  $4,080 
B)  $7,320 
C)  $6,120 
D)  $11,000 
A)  $4,080 
B)  $7,320 
C)  $6,120 
D)  $11,000

Question 14

Select the appropriate classification of each of the items listed below.
-6.53x

Accepted Answer

A) Variable rate 
B) Fixed cost 
C) Variable cost 
D) Cost equation 
E) Coefficient of determination 
A) Variable rate 
B) Fixed cost 
C) Variable cost 
D) Cost equation 
E) Coefficient of determination

Question 15

Which of the following is characteristic of step costs?

Accepted Answer

A)  remain the same within the relevant range 
B)  increase in direct proportion to increases in output 
C)  decrease in direct proportion to increases in output 
D)  have an increased fixed component at specified intervals 
A)  remain the same within the relevant range 
B)  increase in direct proportion to increases in output 
C)  decrease in direct proportion to increases in output 
D)  have an increased fixed component at specified intervals

Question 16

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Factory supervisor's salary, with respect to units of production

Accepted Answer

A) Variable cost 
B) Fixed cost 
A) Variable cost 
B) Fixed cost

Question 17

When a mixed cost is graphed, what does the Y-intercept correspond to?

Accepted Answer

A)  the fixed cost 
B)  the variable rate 
C)  the number of units sold 
D)  total fixed cost + total variable cost 
A)  the fixed cost 
B)  the variable rate 
C)  the number of units sold 
D)  total fixed cost + total variable cost

Question 18

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Property taxes

Accepted Answer

A) Discretionary fixed cost 
B) Committed fixed cost 
A) Discretionary fixed cost 
B) Committed fixed cost

Question 19

Whitehorse Company manufactures ultrasound equipment. Based on past experience, Whitehorse has found that total annual repair and maintenance cost can be represented by the following formula: total annual repair and maintenance cost = $300,000 + $10.00x, where x = machine hours. Last year, Whitehorse incurred 150,000 machine hours.
Required:
A. What was the total repair and maintenance cost incurred by Whitehorse last year?
B. What was the total fixed repair and maintenance cost incurred by Whitehorse last year?
C. What was the total variable repair and maintenance cost incurred by Whitehorse last year?
D. What was the total repair and maintenance cost per machine hour last year?
E. What was the fixed repair and maintenance cost per machine hour last year?
F. What was the variable repair and maintenance cost per machine hour last year?

Accepted Answer

A. $300,000 + ($10.00 × 150,00

Question 20

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Direct labour (hourly)

Accepted Answer

A) Variable cost 
B) Fixed cost 
A) Variable cost 
B) Fixed cost

Mixed costs have both a fixed and a variable component.

Match each following terms with their correct description from the items listed below. -Y-intercept corresponds to the fixed cost

Refer to Toronto Company. What is the cost formula for electricity cost when using the results of regression?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Depreciation on existing equipment

Lindsay Company had utilities cost of $105,000 at an output level of 30,000 units. The utilities cost was a mixed cost, and the fixed portion was $60,000. What would be the best estimate of total utilities cost at an output level of 50,000 units?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Cost of rework, with respect to number of items reworked

What is the focus of cost behaviour analysis?

Refer to Prince Edward Company. What is the cost formula for maintenance cost when using the result of regression?

Refer to Drumheller Company. Which element is the independent variable?

Match each following terms with their correct description from the items listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Results in the best-fitting line through a set of data points

What is characteristic of variable costs within the relevant range?

Refer to Nova Scotia Accounting Firm. What does "total cost" represent?

Refer to Lake Louise Company. What would be the fixed cost of the janitorial services when using the high-low method?

Select the appropriate classification of each of the items listed below. -6.53x

Which of the following is characteristic of step costs?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Factory supervisor's salary, with respect to units of production

When a mixed cost is graphed, what does the Y-intercept correspond to?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Property taxes

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Direct labour (hourly)

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, Production, Cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 3: Cost Behaviour

Mixed costs have both a fixed and a variable component.

Match each following terms with their correct description from the items listed below. -Y-intercept corresponds to the fixed cost

Refer to Toronto Company. What is the cost formula for electricity cost when using the results of regression?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Depreciation on existing equipment

Lindsay Company had utilities cost of $105,000 at an output level of 30,000 units. The utilities cost was a mixed cost, and the fixed portion was $60,000. What would be the best estimate of total utilities cost at an output level of 50,000 units?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Cost of rework, with respect to number of items reworked

What is the focus of cost behaviour analysis?

Refer to Prince Edward Company. What is the cost formula for maintenance cost when using the result of regression?

Refer to Drumheller Company. Which element is the independent variable?

Match each following terms with their correct description from the items listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Results in the best-fitting line through a set of data points

What is characteristic of variable costs within the relevant range?

Refer to Nova Scotia Accounting Firm. What does "total cost" represent?

Refer to Lake Louise Company. What would be the fixed cost of the janitorial services when using the high-low method?

Select the appropriate classification of each of the items listed below. -6.53x

Which of the following is characteristic of step costs?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Factory supervisor's salary, with respect to units of production

When a mixed cost is graphed, what does the Y-intercept correspond to?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Property taxes

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Direct labour (hourly)

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, Production, Cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters