Question 1

A statistical method for finding the best-fitting cost equation to a set of data is the

Accepted Answer

A)  scattergraph method.
B)  high-low method.
C)  visual fit method.
D)  least-squares regression methoD.Least-squares regression is the only statistical technique among those listed.E) None of the above
F) A) and B)

Question 2

The equation for a mixed cost is total fixed costs + (variable cost per unit × units of activity).Total cost = fixed cost + (variable cost per unit × activity level).

Accepted Answer

A) True 
 B)False

Question 3

Jasper Enterprises had the following cost and production information for April: What is Jasper Enterprise's income under variable costing?

Accepted Answer

A)  $1,400,000
B)  $1,460,000
C)  $1,745,000
D)  $1,785,000E) C) and D)
F) B) and C)

Question 4

The least-squares regression method uses all of the available data to find the best fitting line.Least-squares regression is a statistical data that uses all the available data to find the best fitting line.

Accepted Answer

A) True 
 B)False

Question 5

A scattergraph is useful in recognizing unusual patterns in the cost data.A scattergraph graphically illustrates the relationship between cost and activity,so unusual patterns can be seen visually.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a variable cost?

Accepted Answer

A)  A cost that is $26,000 when production is 65,000,and $26,000 when production is 91,000.
B)  A cost that is $26,000 when production is 65,000,and $36,400 when production is 91,000.
C)  A cost that is $26,000 when production is 65,000,and $52,000 when production is 91,000.
D)  A cost that is $52,000 when production is 65,000,and $52,000 when production is 91,000.E) C) and D)
F) A) and B)

Question 7

The unit contribution margin

Accepted Answer

A)  equals total sales revenue minus total variable costs.
B)  equals total contribution margin times total units.
C)  tells us how much each additional unit sold will increase profit.
D)  equals overall profit per unit.E) All of the above
F) A) and B)

Question 8

A cost driver

Accepted Answer

A)  is the same as a fixed cost.
B)  is an activity that causes total costs to change.
C)  is the same as margin of safety.
D)  is a method of calculating mixed costs.E) A) and B)
F) All of the above

Question 9

The unit contribution margin tells how much each additional unit sold will contribute to covering variable costs.Unit contribution margin tells us how much each additional unit sold will contribute to the bottom line.

Accepted Answer

A) True 
 B)False

Question 10

Elm uses the high-low method of estimating costs.Elm had total costs of $250,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 10,000 units,total costs were $390,000.Elm would estimate variable cost per unit as

Accepted Answer

A)  $70.00.
B)  $45.50.
C)  $28.00.
D)  $52.71.E) A) and B)
F) A) and C)

Question 11

A graph of the relationship between the total cost and the activity level is called a

Accepted Answer

A)  relevant range.
B)  scattergraph.
C)  contribution margin graph.
D)  dependent variable.E) All of the above
F) A) and D)

Question 12

Regression analysis is a cost-estimating approach that uses _______________ to find the cost line.

Accepted Answer

A)  only two data points
B)  all available data points
C)  only four data points
D)  personal intuitionE) A) and D)
F) B) and D)

Question 13

Georgia uses the high-low method of estimating costs.Georgia had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 10,000 units,total costs were $78,000.Georgia would estimate variable cost per unit as

Accepted Answer

A)  $14.00.
B)  $9.10.
C)  $5.60.
D)  $10.54.E) A) and B)
F) C) and D)

Question 14

A mixed cost

Accepted Answer

A)  is fixed over a wider range of activity than a step cost.
B)  is a fixed cost over the relevant range and a variable cost everywhere else.
C)  contains both fixed and variable components.
D)  always increases on a per unit basis.E) All of the above
F) None of the above

Question 15

The cost estimating approach that uses the two most extreme activity observations is the

Accepted Answer

A)  scattergraph method.
B)  high-low method.
C)  visual fit method.
D)  regression analysis.E) A) and B)
F) A) and C)

Question 16

What is the difference between full absorption costing and variable costing?

Accepted Answer

A)  In full absorption costing,all of the non-manufacturing costs are expensed.In variable costing,all of the non-manufacturing expenses are included in the cost of the product.
B)  In full absorption costing,fixed manufacturing overhead is expensed.In variable costing,fixed manufacturing overhead is included in the cost of the product.
C)  In full absorption costing,fixed manufacturing overhead is included in the cost of the product.In variable costing,fixed manufacturing overhead is expensed.
D)  Variable costing must be used for external financial reports while full absorption costing can only be used for internal reporting.E) A) and B)
F) A) and C)

Question 17

The high-low method is a cost estimating approach that uses _______________ to find the cost line.

Accepted Answer

A)  only two data points
B)  all available data points
C)  only four data points
D)  personal intuitionE) None of the above
F) All of the above

Question 18

A scattergraph is a graph with

Accepted Answer

A)  total cost plotted on the vertical axis and activity on the horizontal axis.
B)  activity plotted on the vertical axis and contribution margin on the horizontal axis.
C)  contribution margin plotted on the vertical axis and sales revenues on the horizontal axis.
D)  the vertical axis measured in units and the horizontal axis measured in dollars.E) B) and C)
F) All of the above

Question 19

Step costs are fixed over some range of activity and then increase like a variable cost.Step costs are fixed over a range of activity and then increase in a step-like fashion when a capacity limit is reached.

Accepted Answer

A) True 
 B)False

Question 20

Flint Enterprises had the following cost and production information for April: Inventory increased by 3,000 units during April.What is Flint Enterprise's income under variable costing?

Accepted Answer

A)  $1,400,000
B)  $1,460,000
C)  $1,745,000
D)  $1,785,000E) B) and C)
F) A) and B)

Exam 5: Cost Behavior

A scattergraph is a graph with

Correct AnswerverifiedShow Answer

The unit contribution margin

Correct AnswerverifiedShow Answer

The least-squares regression method uses all of the available data to find the best fitting line.Least-squares regression is a statistical data that uses all the available data to find the best fitting line.

Correct AnswerverifiedShow Answer

What is the difference between full absorption costing and variable costing?

Correct AnswerverifiedShow Answer

Elm uses the high-low method of estimating costs.Elm had total costs of $250,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 10,000 units,total costs were $390,000.Elm would estimate variable cost per unit as

Correct AnswerverifiedShow Answer

Regression analysis is a cost-estimating approach that uses _______________ to find the cost line.

Correct AnswerverifiedShow Answer

The equation for a mixed cost is total fixed costs + (variable cost per unit × units of activity).Total cost = fixed cost + (variable cost per unit × activity level).

Correct AnswerverifiedShow Answer

A mixed cost

Correct AnswerverifiedShow Answer

The high-low method is a cost estimating approach that uses _______________ to find the cost line.

Correct AnswerverifiedShow Answer

A graph of the relationship between the total cost and the activity level is called a

Correct AnswerverifiedShow Answer

Flint Enterprises had the following cost and production information for April: Inventory increased by 3,000 units during April.What is Flint Enterprise's income under variable costing?

Correct AnswerverifiedShow Answer

Georgia uses the high-low method of estimating costs.Georgia had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 10,000 units,total costs were $78,000.Georgia would estimate variable cost per unit as

Correct AnswerverifiedShow Answer

Step costs are fixed over some range of activity and then increase like a variable cost.Step costs are fixed over a range of activity and then increase in a step-like fashion when a capacity limit is reached.

Correct AnswerverifiedShow Answer

Which of the following is a variable cost?

Correct AnswerverifiedShow Answer

A cost driver

Correct AnswerverifiedShow Answer

A scattergraph is useful in recognizing unusual patterns in the cost data.A scattergraph graphically illustrates the relationship between cost and activity,so unusual patterns can be seen visually.

Correct AnswerverifiedShow Answer

The cost estimating approach that uses the two most extreme activity observations is the

Correct AnswerverifiedShow Answer

The unit contribution margin tells how much each additional unit sold will contribute to covering variable costs.Unit contribution margin tells us how much each additional unit sold will contribute to the bottom line.

Correct AnswerverifiedShow Answer

Jasper Enterprises had the following cost and production information for April: What is Jasper Enterprise's income under variable costing?

Correct AnswerverifiedShow Answer

A statistical method for finding the best-fitting cost equation to a set of data is the

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified