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| 1 | |
Which of the following refers to the relationship between cost and activity? |
| | A) | Cost prediction |
| | B) | Cost behavior |
| | C) | Cost estimation |
| | D) | Cost prevention |
| | E) | None of the above |
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| 2 | |
Which describes the flow of the linear relationship between cost behavior, cost prediction, and cost estimation? |
| | A) | Cost behavior → Cost prediction → Cost estimation |
| | B) | Cost prediction → Cost behavior → Cost estimation |
| | C) | Cost estimation → Cost prediction → Cost behavior |
| | D) | Cost estimation → Cost behavior → Cost prediction |
| | E) | Cost behavior → Cost estimation → Cost prediction |
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| 3 | |
The managerial accountant will use the visual-fit method as a tool to accomplish which of the following? |
| | A) | Cost prediction |
| | B) | Cost behavior |
| | C) | Cost estimation |
| | D) | Cost prevention |
| | E) | None of the above |
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| 4 | |
Yummy Donuts uses flour when producing both its yeast and cake donut varieties. Select the answer below that best explains how Yummy's flour cost will change as a result of an increase in production volume. |
| | A) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch6_4a.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"> (4.0K)</a>]]>
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| | B) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch6_4b.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"> (4.0K)</a>]]>
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| | C) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch6_4c.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"> (5.0K)</a>]]>
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| | D) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch6_4d.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"> (4.0K)</a>]]>
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| | E) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch6_4e.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"> (5.0K)</a>]]>
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| 5 | |
Consider the following schedule of activities, unit cost, and total costs: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch6_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"> (21.0K)</a>]]>
Which of the following is correct with respect to each activity and the cost classification of that activity? |
| | A) | Activity A: Fixed cost. Activity B: Variable cost. Activity C: Semivariable cost |
| | B) | Activity A: Variable cost. Activity B: Fixed. Activity C: Semivariable cost |
| | C) | Activity A: Fixed cost. Activity B: Semivariable cost. Activity C: Variable cost |
| | D) | Activity A: Semivariable cost. Activity B: Fixed cost. Activity C: Variable cost |
| | E) | Activity A: Semivariable cost. Activity B: Variable cost. Activity C: Fixed cost |
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| 6 | |
Consider the following schedule of activities, unit cost, and total costs:  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch6_6.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"> (21.0K)</a>]]>
Which of the Activities is most likely a semivariable cost? |
| | A) | Activity A |
| | B) | Activity B |
| | C) | Activity C |
| | D) | All of the above |
| | E) | None of the above |
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| 7 | |
When using a semivariable cost behavior pattern to approximate a curvilinear cost, the approximation should be limited to which of the following? |
| | A) | Determining only the variable portion of the cost |
| | B) | The curvilinear costs within the relevant range of activity |
| | C) | All activity above the relevant range of activity |
| | D) | The approximate fixed cost portion |
| | E) | All of the above |
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| 8 | |
Yummy Donuts uses flour when producing both its yeast and cake donut varieties. Select the answer below that best explains how Yummy's flour cost would be classified. |
| | A) | an engineered cost |
| | B) | a committed cost |
| | C) | a discretionary cost |
| | D) | a guaranteed cost |
| | E) | none of the above |
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| 9 | |
Consider the following costs incurred by a small state university and identify the cost which would be an example of a committed cost? |
| | A) | Salaries paid to tenured faculty in the Engineering school |
| | B) | Advertising and promotion |
| | C) | Salaries paid to non-tenured faculty teaching under an annual contract |
| | D) | Contributions to charities |
| | E) | Training programs for graduate teaching assistants |
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| 10 | |
Sales personnel are paid a fixed, monthly salary and a commission of 5 percent of net sales. Cost estimation of the Sales Salaries Expense account might be accomplished most easily by which of the following methods? |
| | A) | Multiple regression |
| | B) | Account-classification |
| | C) | Visual-fit |
| | D) | High-low |
| | E) | Least-squares regression |
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| 11 | |
Consider the following:  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch6_11.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"> (12.0K)</a>]]>
Use the high-low method of cost estimation to solve for the fixed and variable cost portions of this cost and select the appropriate answer. |
| | A) | Fixed cost: $ 6,000; variable cost: $1.20 per unit. |
| | B) | Fixed cost: $22,000; variable cost: $2.20 per unit. |
| | C) | Fixed cost: $10,000; variable cost: $1.20 per unit. |
| | D) | Fixed cost: $ 4,000; variable cost: $1.20 per unit. |
| | E) | Fixed cost: $ 6,000; variable cost: $2.20 per unit |
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| 12 | |
Consider the following cost for the first and second quarters of the fiscal year: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch6_12.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"> (19.0K)</a>]]>
Use the high-low method of cost estimation and determine the estimated total cost for July, which is budgeted for 9,000 units of activity. |
| | A) | $23,750 |
| | B) | $21,500 |
| | C) | $23,150 |
| | D) | $22,550 |
| | E) | $26,200 |
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| 13 | |
To solve for total costs when two or more independent variables exist, you should use which of the following for cost estimation? |
| | A) | A simple regression equation |
| | B) | The high-low method |
| | C) | A multiple regression equation |
| | D) | A goodness of fit |
| | E) | Visual-fit method |
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| 14 | |
The phenomenon of labor time and labor cost declining as output increases is known as which of the following? |
| | A) | Experience curve |
| | B) | Learning curve |
| | C) | Variable cost curve |
| | D) | Multiple regression |
| | E) | Simple regression |
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| 15 | |
Which of the following frequently is a problem that complicates the process of data collection? |
| | A) | Missing data |
| | B) | Outliers |
| | C) | Mismatched time periods |
| | D) | Inflation |
| | E) | All of the above |
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