Question 1

What is an advantage of using the least squares (regression) method rather than the high-low method?

Accepted Answer

A)  It can be calculated without a calculator. 
B)  Two points are used to develop the cost function. 
C)  For a given set of data, it will always produce the same cost formulae. 
D)  The outlying observations have no effect on the cost function when the calculations are complete. 
A)  It can be calculated without a calculator. 
B)  Two points are used to develop the cost function. 
C)  For a given set of data, it will always produce the same cost formulae. 
D)  The outlying observations have no effect on the cost function when the calculations are complete.

Question 2

What will be the result if production volume increases from 4,000 to 5,000 units?

Accepted Answer

A)  Total costs will increase by 20%. 
B)  Total costs will increase by 25%. 
C)  Total variable costs will increase by 25%. 
D)  Mixed and variable costs will increase by 25%. 
A)  Total costs will increase by 20%. 
B)  Total costs will increase by 25%. 
C)  Total variable costs will increase by 25%. 
D)  Mixed and variable costs will increase by 25%.

Question 3

Select the appropriate classification of each of the items listed below.
-$9097.80

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 4

A driver is a factor that causes or leads to a change in a cost.

Accepted Answer

A) True 
 B)False

Question 5

What is characteristic of discretionary fixed costs?

Accepted Answer

A)  They cannot be easily changed. 
B)  They increase as output increases. 
C)  They often involve a long-term contract. 
D)  They can be easily changed by management. 
A)  They cannot be easily changed. 
B)  They increase as output increases. 
C)  They often involve a long-term contract. 
D)  They can be easily changed by management.

Question 6

Refer to Lethbridge Company. If the company incurs 9,600 labour hours for the year, what would be the estimate of total utility cost?

Accepted Answer

A)  $96,960 
B)  $98,360 
C)  $113,760 
D)  $120,960 
A)  $96,960 
B)  $98,360 
C)  $113,760 
D)  $120,960

Question 7

Which of the following is the best example of a variable cost for a medical lab?

Accepted Answer

A)  bandages 
B)  salary of receptionist 
C)  leasing lab equipment 
D)  advertising on local radio station 
A)  bandages 
B)  salary of receptionist 
C)  leasing lab equipment 
D)  advertising on local radio station

Question 8

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.
-Executive travel costs

Accepted Answer

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

Question 9

Which of the following is the best example of a discretionary fixed cost?

Accepted Answer

A)  executive travel costs 
B)  the cost of leasing machinery 
C)  licence fees for fleet of vehicles 
D)  depreciation on a factory building 
A)  executive travel costs 
B)  the cost of leasing machinery 
C)  licence fees for fleet of vehicles 
D)  depreciation on a factory building

Question 10

Refer to Edmonton Company. What is the variable rate for the utility cost when using the high-low method?

Accepted Answer

A)  $1.02 
B)  $1.07 
C)  $2.00 
D)  $2.80 
A)  $1.02 
B)  $1.07 
C)  $2.00 
D)  $2.80

Question 11

Refer to Regina Company. What is the independent variable of the cost formula for equipment maintenance?

Accepted Answer

A)  the total cost 
B)  the fixed cost 
C)  the variable rate 
D)  number of machine hours 
A)  the total cost 
B)  the fixed cost 
C)  the variable rate 
D)  number of machine hours

Question 12

Refer to Saskatoon Company. Using the least squares (regression) method, what is the forecasted utility cost at 3,000 machine hours (rounded to the nearest dollar)?

Accepted Answer

A)  $10,631 
B)  $28,288 
C)  $37,116 
D)  $45,945 
A)  $10,631 
B)  $28,288 
C)  $37,116 
D)  $45,945

Question 13

Explain the differences among variable, fixed, and mixed costs.

Accepted Answer

A variable cost changes in direct propor

Question 14

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.
-Warehouse rental, under existing contract

Accepted Answer

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

Question 15

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 of equipment, using a straight-line basis

Accepted Answer

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

Question 16

What is a characteristic of the scattergraph method?

Accepted Answer

A)  uses two data points 
B)  may reveal outliers 
C)  is the most accurate method 
D)  has the advantage of objectivity 
A)  uses two data points 
B)  may reveal outliers 
C)  is the most accurate method 
D)  has the advantage of objectivity

Question 17

Refer to St. John's Company. If output was 5,000 units in March and 10,000 units in April, which of the following can be assumed?

Accepted Answer

A)  Materials are the only variable cost. 
B)  Utilities and materials are variable costs. 
C)  Insurance and depreciation are mixed costs. 
D)  Utilities, insurance, and depreciation are fixed costs. 
A)  Materials are the only variable cost. 
B)  Utilities and materials are variable costs. 
C)  Insurance and depreciation are mixed costs. 
D)  Utilities, insurance, and depreciation are fixed costs.

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.
-Cost of gear shifters, with respect to number of vehicles produced

Accepted Answer

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

Question 19

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.
-Steel used in production

Accepted Answer

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

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.
-Cost of tires, with respect to number of vehicles produced

Accepted Answer

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

What is an advantage of using the least squares (regression) method rather than the high-low method?

What will be the result if production volume increases from 4,000 to 5,000 units?

Select the appropriate classification of each of the items listed below. -$9097.80

A driver is a factor that causes or leads to a change in a cost.

What is characteristic of discretionary fixed costs?

Refer to Lethbridge Company. If the company incurs 9,600 labour hours for the year, what would be the estimate of total utility cost?

Which of the following is the best example of a variable cost for a medical lab?

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. -Executive travel costs

Which of the following is the best example of a discretionary fixed cost?

Refer to Edmonton Company. What is the variable rate for the utility cost when using the high-low method?

Refer to Regina Company. What is the independent variable of the cost formula for equipment maintenance?

Refer to Saskatoon Company. Using the least squares (regression) method, what is the forecasted utility cost at 3,000 machine hours (rounded to the nearest dollar)?

Explain the differences among variable, fixed, and mixed 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. -Warehouse rental, under existing contract

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 of equipment, using a straight-line basis

What is a characteristic of the scattergraph method?

Refer to St. John's Company. If output was 5,000 units in March and 10,000 units in April, which of the following can be assumed?

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 gear shifters, with respect to number of vehicles produced

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. -Steel used in production

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 tires, with respect to number of vehicles produced

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

What is an advantage of using the least squares (regression) method rather than the high-low method?

What will be the result if production volume increases from 4,000 to 5,000 units?

Select the appropriate classification of each of the items listed below. -$9097.80

A driver is a factor that causes or leads to a change in a cost.

What is characteristic of discretionary fixed costs?

Refer to Lethbridge Company. If the company incurs 9,600 labour hours for the year, what would be the estimate of total utility cost?

Which of the following is the best example of a variable cost for a medical lab?

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. -Executive travel costs

Which of the following is the best example of a discretionary fixed cost?

Refer to Edmonton Company. What is the variable rate for the utility cost when using the high-low method?

Refer to Regina Company. What is the independent variable of the cost formula for equipment maintenance?

Refer to Saskatoon Company. Using the least squares (regression) method, what is the forecasted utility cost at 3,000 machine hours (rounded to the nearest dollar)?

Explain the differences among variable, fixed, and mixed 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. -Warehouse rental, under existing contract

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 of equipment, using a straight-line basis

What is a characteristic of the scattergraph method?

Refer to St. John's Company. If output was 5,000 units in March and 10,000 units in April, which of the following can be assumed?

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 gear shifters, with respect to number of vehicles produced

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. -Steel used in production

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 tires, with respect to number of vehicles produced

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