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| 1 | |
Strategic management requires accurate estimation of costs for all but which one of the following applications? |
| | A) | to facilitate target costing |
| | B) | to facilitate strategic positioning analysis |
| | C) | to facilitate life cycle costing |
| | D) | to facilitate preparation of the financial statements |
| | E) | to facilitate value-chain analysis |
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| 2 | |
Which is the most import step in cost estimation |
| | A) | graph the data. |
| | B) | choose the estimation method. |
| | C) | select the cost driver(s). |
| | D) | assess the accuracy of the cost estimate. |
| | E) | define the cost object. |
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| 3 | |
What is the first step when using cost estimation? |
| | A) | Determine the cost drivers. |
| | B) | Define the cost object. |
| | C) | Select the estimation method. |
| | D) | Assess the accuracy of the estimate. |
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| 4 | |
Herman Corporation has the following information for the current and prior years: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025532/966305/ch8_q4_1.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"> (10.0K)</a>]]>
Utilities is what type of cost? |
| | A) | Variable cost |
| | B) | Mixed cost |
| | C) | Step cost |
| | D) | Fixed cost |
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| 5 | |
Motor Company has the following information pertaining to a regression model. <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025532/966417/8_5.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"> (67.0K)</a>]]>
Which of the following statements is TRUE? |
| | A) | Goodness of fit is too small. |
| | B) | The coefficient for direct labor hours is significant. |
| | C) | The coefficient for machine hours is not significant. |
| | D) | The best estimate of overhead costs when direct labor hours and machine hours are 100 and 200, respectively, is $11,000. |
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| 6 | |
Motor Company has the following information pertaining to a regression model.<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025532/966417/8_5.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"> (67.0K)</a>]]> What is the best estimate of overhead costs when direct labor hours and machine hours are 200 and 300, respectively? |
| | A) | $6,000 |
| | B) | $17,000 |
| | C) | $19,000 |
| | D) | $23,000 |
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| 7 | |
Motor Company has the following information pertaining to a regression model.<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025532/966417/8_5.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"> (67.0K)</a>]]> What is the estimation error when actual overhead costs is $22,300 and direct labor hours and machine hours are 200 and 300, respectively? |
| | A) | $700 |
| | B) | $4,300 |
| | C) | $1,700 |
| | D) | $6,000 |
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| 8 | |
_______________ is used to represent the presence or absence of a condition in a regression model: |
| | A) | A dummy variable |
| | B) | An independent variable |
| | C) | The estimation error |
| | D) | The unit variable cost |
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| 9 | |
In regression analysis, what does the variable "X" stand for in the model Y = a + bX + e? |
| | A) | The amount of the dependent variable, the cost to be estimated. |
| | B) | The regression error, which is the distance between the regression line and the data point. |
| | C) | The value for the independent variable, the cost driver for the cost to be estimated; there may be one or more cost drivers. |
| | D) | The unit variable cost, also called the coefficient of the independent variable. |
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| 10 | |
Regression analysis is more precise and reliable than the high-low method of cost estimation because regression analysis: |
| | A) | uses mean absolute error in determining the cost estimation. |
| | B) | uses all the data points, not just two. |
| | C) | fits its data into an equation. |
| | D) | takes more time. |
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| 11 | |
Which of the following is NOT a common non-linearity problem when using regression analysis? |
| | A) | Trend/Seasonality. |
| | B) | Outliers. |
| | C) | Data Shifts. |
| | D) | Mismatched Time Periods. |
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| 12 | |
An outlier in the data for a regression analysis is likely to affect the R-squared value, the standard error of the estimate, and in addition: |
| | A) | The reliability of the regression. |
| | B) | The slope of the regression line. |
| | C) | The precision of the regression. |
| | D) | The t-value of the independent variable. |
| | E) | The p-value of the independent variable. |
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| 13 | |
The maximum learning rate in cost estimation is: |
| | A) | 1.0. |
| | B) | .9. |
| | C) | .8. |
| | D) | .5. |
| | E) | 0.0. |
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| 14 | |
Mean squared variance is the ratio of the amount of variance of a component to the number of: |
| | A) | data points utilized. |
| | B) | analyses requested. |
| | C) | degrees of freedom for that component. |
| | D) | iterations required in the calculations. |
| | E) | None of the above answers is correct. |
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| 15 | |
What is an OK value for goodness of fit? |
| | A) | Should be greater than 2.0. |
| | B) | Should be small relative to the dependent variable. |
| | C) | Should be small. |
| | D) | Should be between 2.0 and 3.0. |
| | E) | Should be approximately .75 or better. |
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