Question 1

Innova, 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:

Accepted Answer

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Question 2

Which of the following costs is a variable cost?

Accepted Answer

A)   supervisors' salaries
B)   research and development
C)   materials used in production
D)   rentE) C) and D)
F) None of the above

Question 3

The method for analyzing cost behavior that generally classifies general ledger accounts is

Accepted Answer

A)   account analysis method.
B)   multiple regression method.
C)   industrial engineering method.
D)   learning curve method.E) A) and C)
F) A) and B)

Question 4

The activity-based resource usage model improves managerial control and decision making such as

Accepted Answer

A)   the best way to use excess activity capacity in the system.
B)   maximization of individual unit performance.
C)   increasing the allocation of costs.
D)   focusing on managing costs rather than activities.E) C) and D)
F) A) and D)

Question 5

_______________ are those that are acquired from outside sources, where the terms of acquisition do NOT require any long-term commitment for any given amount of the resource.

Accepted Answer

A)   Flexible resources
B)   Committed resources
C)   Discretionary fixed expenses
D)   Committed fixed expensesE) B) and C)
F) A) and D)

Question 6

Kane Corporation found its maintenance cost and sales dollars to be somewhat correlated.Last year's high and low observations were as follows:  What is the fixed portion of the maintenance cost?

Accepted Answer

A)   $24,000
B)   $42,000
C)   $30,000
D)   $12,000E) B) and C)
F) A) and B)

Question 7

Figure 3-4 The following information is available for electricity costs for the last six months of the year:
 
-Refer to Figure 3-4.What are the fixed costs?

Accepted Answer

A)   $420
B)   $100
C)   $200
D)   none of theseE) All of the above
F) C) and D)

Question 8

If an automobile manufacturer changes from skilled labor to computer-controlled assembly procedures, the past data

Accepted Answer

A)   are useful in predicting future costs.
B)   are of little or no value in predicting future costs.
C)   are representative of future costs.
D)   should be used without adjustments to predict future costs.E) All of the above
F) B) and C)

Question 9

Flexible resources

Accepted Answer

A)   are supplied as needed.
B)   are acquired from outside sources, not requiring a long-term commitment.
C)   have no unused capacity.
D)   all of these.E) A) and B)
F) A) and C)

Question 10

Holly Corporation has the following costs for 1,000 units:  What is the total amount of direct materials for 100 units?

Accepted Answer

A)   $ 1.50
B)   $ 3.00
C)   $150.00
D)   $225.00E) A) and B)
F) B) and C)

Question 11

The following information was available about supplies cost for the second quarter of the year:  Using the high-low method, the estimate of supplies cost at 1,000 units of production is

Accepted Answer

A)   $2,700.
B)   $4,460.
C)   $4,900.
D)   $7,100.E) A) and B)
F) A) and C)

Question 12

Figure 3-8 The following computer printout estimated overhead costs using multiple regression:
 During the year the company used 1,000 setup hours and 500 parts.
-
Refer to Figure 3-8.Which slope and intercept parameters are significant at the 0.05 level?

Accepted Answer

A)   intercept
B)   setup hours
C)   number of parts
D)   all of theseE) A) and C)
F) B) and C)

Question 13

What does a correlation coefficient near 0 mean?

Accepted Answer

A)   Two variables are moving in the opposite direction.
B)   Two variables are moving in the same direction.
C)   Two variables are unrelated.
D)   One variable is a good predictor of the other.E) None of the above
F) A) and B)

Question 14

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.E) B) and D)
F) All of the above

Question 15

Which of the following is an example of a discretionary fixed expense?

Accepted Answer

A)   direct labor
B)   depreciation on a factory building
C)   insurance on a building
D)   property taxes on a factory buildingE) B) and D)
F) None of the above

Question 16

Figure 3-6 The following information is available for maintenance costs:

- Refer to Figure 3-6.Using a computer or calculator, compute the estimate of the fixed portion of maintenance costs using the method of least squares.Rounded to dollars, this value would be

Accepted Answer

A)   $66.
B)   $160.
C)   $166.
D)   $575.E) B) and C)
F) A) and D)

Question 17

Cost behavior analysis focuses on how costs

Accepted Answer

A)   react to changes in profit.
B)   change over time.
C)   react to changes in activity level.
D)   both a and c.E) None of the above
F) B) and C)

Question 18

Direct materials are an example of a

Accepted Answer

A)   fixed cost.
B)   variable cost.
C)   step cost.
D)   mixed cost.E) B) and C)
F) C) and D)

Question 19

Given the following graphs, which graph represents fixed costs?

Accepted Answer

A)   II
B)   I
C)   III
D)   none of theseE) A) and D)
F) None of the above

Question 20

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.E) All of the above
F) A) and D)

Exam 3: Cost Behavior

The following information was available about supplies cost for the second quarter of the year: Using the high-low method, the estimate of supplies cost at 1,000 units of production is

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Which of the following is an example of a discretionary fixed expense?

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Given the following graphs, which graph represents fixed costs?

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Kane Corporation found its maintenance cost and sales dollars to be somewhat correlated.Last year's high and low observations were as follows: What is the fixed portion of the maintenance cost?

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Figure 3-6 The following information is available for maintenance costs: - Refer to Figure 3-6.Using a computer or calculator, compute the estimate of the fixed portion of maintenance costs using the method of least squares.Rounded to dollars, this value would be

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Figure 3-8 The following computer printout estimated overhead costs using multiple regression: During the year the company used 1,000 setup hours and 500 parts. - Refer to Figure 3-8.Which slope and intercept parameters are significant at the 0.05 level?

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The activity-based resource usage model improves managerial control and decision making such as

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The method for analyzing cost behavior that generally classifies general ledger accounts is

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Innova, 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:

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Figure 3-4 The following information is available for electricity costs for the last six months of the year: -Refer to Figure 3-4.What are the fixed costs?

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Flexible resources

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Cost behavior analysis focuses on how costs

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_______________ are those that are acquired from outside sources, where the terms of acquisition do NOT require any long-term commitment for any given amount of the resource.

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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

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Holly Corporation has the following costs for 1,000 units: What is the total amount of direct materials for 100 units?

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Which of the following costs is a variable cost?

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Direct materials are an example of a

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If an automobile manufacturer changes from skilled labor to computer-controlled assembly procedures, the past data

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

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What does a correlation coefficient near 0 mean?

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_TB2043_00...
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