Question 1

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.
-Salary of Chief Financial Officer

Accepted Answer

A) Variable cost 
B) Fixed cost

Question 2

Refer to Nova Scotia Accounting Firm. What does $87,100 represent?

Accepted Answer

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

Question 3

Select the appropriate classification of each of the items listed below.
-99%

Accepted Answer

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

Question 4

What is the relevant range?

Accepted Answer

A)  the normal range of inputs 
B)  the range of output where total costs do not change 
C)  the range of output where cost relationships are valid 
D)  the range of output where total variable costs do not change

Question 5

Refer to Lake Louise Company. What would be the estimate of total janitorial cost at a level of 625 machine hours?

Accepted Answer

A)  $4,080 
B)  $6,120 
C)  $7,500 
D)  $11,580

Question 6

As output increases, fixed costs per unit will also increase.

Accepted Answer

A) True 
 B)False

Question 7

"Outliers" are points that do NOT seem to fit the general pattern of behaviour.

Accepted Answer

A) True 
 B)False

Question 8

The average unit cost at a monthly volume of 9,000 units is $3, and the average unit cost at a monthly volume of 22,500 units is $2.10.
Required:
A. Develop an equation for total monthly costs.
B. What are the total monthly costs if 14,000 units are produced?

Accepted Answer

The answer of The average unit cost at a monthly...

Question 9

Refer to Montreal Clothing Store. What does "number of customers" represent?

Accepted Answer

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

Question 10

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 transporting bicycles to retailer, with respect to number of shipments

Accepted Answer

A) Variable cost 
B) Fixed cost

Question 11

Refer to Kelowna Company. What is the set of high and low months? High Low

Accepted Answer

A)  June July 
B)  June October 
C)  October June 
D)  October September

Question 12

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 executive training seminars

Accepted Answer

A) Discretionary fixed cost 
B) Committed fixed cost

Question 13

Which of the following is the best example of a discretionary fixed cost for a doctor's office?

Accepted Answer

A)  advertising 
B)  cost of bandages 
C)  salary of receptionist 
D)  office insurance

Question 14

Match each following terms with their correct description from the items listed below.
-Can be changed by management

Accepted Answer

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

Question 15

The cost of raw materials used is usually a variable cost.

Accepted Answer

A) True 
 B)False

Question 16

Which statement best describes a fixed cost within the relevant range?

Accepted Answer

A)  It does not change in total as output changes. 
B)  It has both a variable and a fixed component. 
C)  It increases in total as level of activity increases. 
D)  It decreases in total as level of activity decreases.

Question 17

Which term refers to the range of activity within which a cost function is valid?

Accepted Answer

A)  normal range 
B)  activity range 
C)  relevant range 
D)  discretionary range

Question 18

Refer to Saskatoon Company. Using the least squares (regression) method, what is the forecasted utility cost at 4,000 machine hours (rounded to the nearest dollar)?

Accepted Answer

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

Question 19

Match each following terms with their correct description from the items listed below.
-Has an increased fixed component at specified intervals

Accepted Answer

A) Variable cost 
B) Fixed cost 
C) Mixed cost 
D) Step cost

Question 20

Which statement best describes the least squares (regression) method?

Accepted Answer

A)  It is easily done by hand. 
B)  It statistically finds a "best fitting" line. 
C)  It uses the highest and lowest data point. 
D)  It is a graphical way of separating a mixed cost.

Exam 3: Cost Behaviour

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. -Salary of Chief Financial Officer

Refer to Nova Scotia Accounting Firm. What does $87,100 represent?

Select the appropriate classification of each of the items listed below. -99%

What is the relevant range?

Refer to Lake Louise Company. What would be the estimate of total janitorial cost at a level of 625 machine hours?

As output increases, fixed costs per unit will also increase.

"Outliers" are points that do NOT seem to fit the general pattern of behaviour.

The average unit cost at a monthly volume of 9,000 units is $3, and the average unit cost at a monthly volume of 22,500 units is $2.10. Required: A. Develop an equation for total monthly costs. B. What are the total monthly costs if 14,000 units are produced?

Refer to Montreal Clothing Store. What does "number of customers" represent?

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 transporting bicycles to retailer, with respect to number of shipments

Refer to Kelowna Company. What is the set of high and low months? High Low

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 executive training seminars

Which of the following is the best example of a discretionary fixed cost for a doctor's office?

Match each following terms with their correct description from the items listed below. -Can be changed by management

The cost of raw materials used is usually a variable cost.

Which statement best describes a fixed cost within the relevant range?

Which term refers to the range of activity within which a cost function is valid?

Refer to Saskatoon Company. Using the least squares (regression) method, what is the forecasted utility cost at 4,000 machine hours (rounded to the nearest dollar) ?

Match each following terms with their correct description from the items listed below. -Has an increased fixed component at specified intervals

Which statement best describes the least squares (regression) method?