Question 1

Mixed costs are costs that have both a fixed and a variable component.

Accepted Answer

A) True 
 B)False

Question 2

Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that starts at the origin and reaches a maximum value beyond which the line is parallel to the horizontal axis?

Accepted Answer

A)  total direct material costs 
B)  a consultant paid $100 per hour with a maximum fee of $2,000 
C)  employees who are paid $15 per hour and guaranteed a minimum weekly wage of $300 
D)  rent on exhibit space at a convention 
A)  total direct material costs 
B)  a consultant paid $100 per hour with a maximum fee of $2,000 
C)  employees who are paid $15 per hour and guaranteed a minimum weekly wage of $300 
D)  rent on exhibit space at a convention

Question 3

Figure 3-7
The following computer printout estimated overhead costs using regression:
     Please find the following statistical table
   During the last accounting period 10,000 DLH were worked
.
-Refer to Figure 3-7. The hypothesis tests of the cost parameters indicate(s) that

Accepted Answer

A)  the slope is significantly different from zero. 
B)  the intercept is significantly different from zero. 
C)  both the slope and intercept are not significant. 
D)  both the slope and intercept are significant. 
A)  the slope is significantly different from zero. 
B)  the intercept is significantly different from zero. 
C)  both the slope and intercept are not significant. 
D)  both the slope and intercept are significant.

Question 4

Longhorn Enterprises rents a truck for a flat fee plus an additional charge per mile. What type of cost is the rent?

Accepted Answer

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

Question 5

Drivers that explain changes in costs as factors other than changes in units produced are called:

Accepted Answer

A)  Functional based cost drivers 
B)  Non-unit-based cost drivers 
C)  Unit-based cost drivers 
D)  None of these 
A)  Functional based cost drivers 
B)  Non-unit-based cost drivers 
C)  Unit-based cost drivers 
D)  None of these

Question 6

The parameter is the point at which the mixed cost line intercepts the cost (vertical) axis.

Accepted Answer

The answer of The parameter is the point at which...

Question 7

The following information was taken from a computer printout generated with the least-squares method for use in estimating overhead costs:   The cost formula is

Accepted Answer

A)  Overhead = $5,700 - $45X 
B)  Overhead = $5,700 + $45X 
C)  Overhead = $5,700 + ($45 × 0.72) 
D)  Overhead = $5,700 × 0.72 
A)  Overhead = $5,700 - $45X 
B)  Overhead = $5,700 + $45X 
C)  Overhead = $5,700 + ($45 × 0.72) 
D)  Overhead = $5,700 × 0.72

Question 8

Figure 3-3
The Sandoval Company has four process engineers that are each able to process 1,500 design changes. Last year 5,250 design changes were produced by the four engineers. Each engineer is paid $60,000 per year
-Refer to Figure 3-3. Calculate the unused capacity.

Accepted Answer

A)  750 change orders 
B)  1,375 change orders 
C)  4,000 change orders 
D)  2,000 change orders 
A)  750 change orders 
B)  1,375 change orders 
C)  4,000 change orders 
D)  2,000 change orders

Question 9

In the method of least squares, the deviation is the difference between the

Accepted Answer

A)  predicted and estimated costs. 
B)  predicted and average costs. 
C)  average and actual costs. 
D)  predicted and actual costs. 
A)  predicted and estimated costs. 
B)  predicted and average costs. 
C)  average and actual costs. 
D)  predicted and actual costs.

Question 10

Costs that follow a step-cost behavior are defined as costs.

Accepted Answer

The answer of Costs that follow a step-cost behavior are...

Question 11

Stanfil Corporation developed a cost function for manufacturing overhead costs of Y = $8,000 + $1.60X. Estimated manufacturing overhead costs at 10,000 units of production are

Accepted Answer

A)  $16,000. 
B)  $17,600. 
C)  $24,000. 
D)  $26,000. 
A)  $16,000. 
B)  $17,600. 
C)  $24,000. 
D)  $26,000.

Question 12

Salaries paid to shift supervisors are an example of a

Accepted Answer

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

Question 13

Highestec, Inc., is beginning the production of a new product. Management believes that 500 labor hours will be required to complete the new unit. A 90 percent cumulative average-time learning curve model for direct labor hours is assumed to be valid. Data on costs are as follows:   Required:

Accepted Answer

a.
 @#IMG-DLM& c. 0.90 model = $200,000

Mixed costs are costs that have both a fixed and a variable component.

Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that starts at the origin and reaches a maximum value beyond which the line is parallel to the horizontal axis?

Figure 3-7 The following computer printout estimated overhead costs using regression: Please find the following statistical table During the last accounting period 10,000 DLH were worked . -Refer to Figure 3-7. The hypothesis tests of the cost parameters indicate(s) that

Longhorn Enterprises rents a truck for a flat fee plus an additional charge per mile. What type of cost is the rent?

Drivers that explain changes in costs as factors other than changes in units produced are called:

The parameter is the point at which the mixed cost line intercepts the cost (vertical) axis.

The following information was taken from a computer printout generated with the least-squares method for use in estimating overhead costs: The cost formula is

Figure 3-3 The Sandoval Company has four process engineers that are each able to process 1,500 design changes. Last year 5,250 design changes were produced by the four engineers. Each engineer is paid $60,000 per year -Refer to Figure 3-3. Calculate the unused capacity.

In the method of least squares, the deviation is the difference between the

Costs that follow a step-cost behavior are defined as costs.

Stanfil Corporation developed a cost function for manufacturing overhead costs of Y = $8,000 + $1.60X. Estimated manufacturing overhead costs at 10,000 units of production are

Salaries paid to shift supervisors are an example of a

Highestec, Inc., is beginning the production of a new product. Management believes that 500 labor hours will be required to complete the new unit. A 90 percent cumulative average-time learning curve model for direct labor hours is assumed to be valid. Data on costs are as follows: Required:

Introduction to Cost Management

Basic Cost Management Concepts

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility, Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 3: Cost Behavior

Mixed costs are costs that have both a fixed and a variable component.

Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that starts at the origin and reaches a maximum value beyond which the line is parallel to the horizontal axis?

Figure 3-7 The following computer printout estimated overhead costs using regression: Please find the following statistical table During the last accounting period 10,000 DLH were worked . -Refer to Figure 3-7. The hypothesis tests of the cost parameters indicate(s) that

Longhorn Enterprises rents a truck for a flat fee plus an additional charge per mile. What type of cost is the rent?

Drivers that explain changes in costs as factors other than changes in units produced are called:

The parameter is the point at which the mixed cost line intercepts the cost (vertical) axis.

The following information was taken from a computer printout generated with the least-squares method for use in estimating overhead costs: The cost formula is

Figure 3-3 The Sandoval Company has four process engineers that are each able to process 1,500 design changes. Last year 5,250 design changes were produced by the four engineers. Each engineer is paid $60,000 per year -Refer to Figure 3-3. Calculate the unused capacity.

In the method of least squares, the deviation is the difference between the

Costs that follow a step-cost behavior are defined as costs.

Stanfil Corporation developed a cost function for manufacturing overhead costs of Y = $8,000 + $1.60X. Estimated manufacturing overhead costs at 10,000 units of production are

Salaries paid to shift supervisors are an example of a

Highestec, Inc., is beginning the production of a new product. Management believes that 500 labor hours will be required to complete the new unit. A 90 percent cumulative average-time learning curve model for direct labor hours is assumed to be valid. Data on costs are as follows: Required:

Introduction to Cost Management

Basic Cost Management Concepts

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility, Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters