Site MapHelpFeedbackTrue or False
True or False
(See related pages)

1
The relationship between cost and activity is called cost behavior.
A)True
B)False
2
Knowledge of cost behavior is a key to cost prediction.
A)True
B)False
3
The process of determining how a particular cost behaves is called cost prediction.
A)True
B)False
4
Cost estimation often focuses on historical data and cost prediction focuses on the future.
A)True
B)False
5
A variable cost changes in total in direct proportion to changes in activity level.
A)True
B)False
6
A cost that does not change in total as activity changes but changes inversely per unit as activity changes is called a fixed cost.
A)True
B)False
7
A step-variable cost is a cost that increases in large steps instead of continuously, like a variable cost.
A)True
B)False
8
A fixed cost remains unchanged in total as activity level varies and remains unchanged per unit of activity.
A)True
B)False
9
The major difference between a step-fixed cost and a step-variable cost is the change in the level of activity relative to the change in cost.
A)True
B)False
10
A Salaries Expense account that includes both salaries and commissions is an example of a semivariable cost.
A)True
B)False
11
A mixed cost is a cost that has both a fixed cost and a variable cost component.
A)True
B)False
12
A curvilinear cost behavior pattern is a curved graph.
A)True
B)False
13
Methods of cost estimation cannot be applied to curvilinear cost patterns.
A)True
B)False
14
A relevant range is the range of activity within which management expects the organization to operate.
A)True
B)False
15
Direct-labor costs, like direct-material costs, are always treated as variable costs.
A)True
B)False
16
Costs that result from an organization's ownership or use of facilities and its basic organization structure are called committed costs.
A)True
B)False
17
Costs that arise as a result of a management decision to spend a particular amount of money for some purpose are called discretionary costs.
A)True
B)False
18
A cost that results from a definitive physical relationship with the activity measure is called an engineered cost.
A)True
B)False
19
Depreciation on buildings is an example of an engineered cost.
A)True
B)False
20
Committed costs can be changed only through relatively major decisions that have long-term implications.
A)True
B)False
21
Variable costs are becoming more prevalent in many industries.
A)True
B)False
22
Computer-integrated manufacturing (CIM) and flexible manufacturing system (FMS) have resulted in increases in committed fixed costs.
A)True
B)False
23
Usually, there are few differences between operations-based cost drivers and volume-based cost drivers.
A)True
B)False
24
Cost behavior patterns are applicable to service industries as well as manufacturing industries.
A)True
B)False
25
Cost estimation is the process of determining how a particular cost behaves.
A)True
B)False
26
Another term for account-classification is account analysis.
A)True
B)False
27
Because each cost has its own behavioral characteristics it is impossible to determine from ledger accounts whether a cost is fixed, variable, or curvilinear.
A)True
B)False
28
A scatter diagram is the result of using the visual-fit method to plot recent observations of a cost at various levels of activity.
A)True
B)False
29
A weakness of the visual-fit method of determining cost behavior is that when the visual-fit cost line is drawn on the scatter diagram there is no way to determine if the cost is curvilinear.
A)True
B)False
30
A data point that falls far away from the other points in a scatter diagram is called an outlier.
A)True
B)False
31
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0070667705/388289/ch07_31.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (11.0K)</a>
Using the high-low method of cost estimations, the variable cost per unit is $1.20.
A)True
B)False
32
The high-low method of cost estimation is superior to the visual-fit method of cost estimation.
A)True
B)False
33
A method used to estimate objectively a cost behavior pattern that minimizes the sum of the squared deviations between the cost line and the data points is called least squares regression method.
A)True
B)False
34
In the linear equation of Y = a + bX, Y is referred to as a dependent variable.
A)True
B)False
35
The cost line fit to the data using least-squares regression is called the regression line.
A)True
B)False
36
In the equation of Y = a + bX, X is referred to as independent variable.
A)True
B)False
37
If, in the equation of Y = a + bX, b = $2.40, Y = $36,000,  and X = 5,000, then fixed costs are $24,000.
A)True
B)False
38
The perspective of economic plausibility is of secondary concern when evaluating a regression line.
A)True
B)False
39
When there is one dependent variable and two or more independent variables, simple-regression analysis can be used to estimate a cost behavior pattern.
A)True
B)False
40
The equation of Y = a + b1X1 + b2X2 is likely to be solved using multiple regression, rather than least-squares regression.
A)True
B)False
41
The collection of data appropriate for cost estimation often requires little skill or experience.
A)True
B)False
42
A major difference between the engineering method and other methods of cost estimation (visual-fit, high-low, least-squares regression, and multiple regression) is that the engineering method deals with cost incurrence rather than cost history.
A)True
B)False
43
A learning curve is a graphical presentation of the average time a process is required for cumulative production of output.
A)True
B)False
44
The experience curve is a graph (or other mathematical representation) that shows how a broad set of costs decline as cumulative production output increases.
A)True
B)False
45
The use of temporary contract workers has recently been the fastest-growing sector of employment.
A)True
B)False





To learn more about the book this website supports, please visit its Information Center.
(c)2009 Tata McGraw-Hill
Any use is subject to the Terms of Use and Privacy Policy.
Tata McGraw-Hill is one of the many fine businesses ofThe McGraw-Hill Companies.


Hilton (SIE)Online Learning Center

Home > Chapter 7 > True or False