Question 1

If Yang produces 10,000 units,the total cost would be:

Accepted Answer

A)  $90,000.
B)  $100,000.
C)  $110,000.
D)  $125,000.
E)  an amount other than those given abovE.

Question 2

When graphed,a typical fixed cost appears as:

Accepted Answer

A)  a horizontal line.
B)  a vertical line.
C)  a u-shaped line.
D)  a diagonal line that slopes downward to the right.
E)  a diagonal line that slopes upward to the right.

Question 3

Costs that remain the same over a wide range of activity,but jump to a different amount outside that range,are termed:

Accepted Answer

A)  step-fixed costs.
B)  step-variable costs.
C)  semivariable costs.
D)  curvilinear costs.
E)  mixed costs. A

Question 4

Within the relevant range of activity,costs:

Accepted Answer

A)  can be estimated with reasonable accuracy.
B)  can be expected to change radically.
C)  exhibit decreasing marginal cost patterns.
D)  exhibit increasing marginal cost patterns.
E)  cannot be estimated satisfactorily.

Question 5

A review of Parrish Corporation's accounting records found that at a volume of 90,000 units,the variable and fixed cost per unit amounted to $8 and $4,respectively.On the basis of this information,what amount of total cost would Parrish anticipate at a volume of 85,000 units?

Accepted Answer

A)  $1,020,000.
B)  $1,040,000.
C)  $1,060,000.
D)  $1,080,000.
E)  Some other amount not listed abovE.

Question 6

Costs that result from a company's ownership or use of facilities and its basic organizational structure are termed:

Accepted Answer

A)  discretionary fixed costs.
B)  committed fixed costs.
C)  discretionary variable costs.
D)  committed variable costs.
E)  engineered costs.

Question 7

Mastel Company has a variable selling cost.If sales volume increases,how will the total variable cost and the variable cost per unit behave?

Accepted Answer

A)  Choice A
B)  Choice B
C)  Choice C
D)  Choice D
E)  Choice E

Question 8

The relevant range is that range of activity:

Accepted Answer

A)  where a company achieves its maximum efficiency.
B)  where units produced equal units sold.
C)  where management expects the firm to operate.
D)  where the firm will earn a profit.
E)  where expected results are abnormally high.

Question 9

A variable cost that has a definitive physical relationship to the activity measure is called a(n) :

Accepted Answer

A)  discretionary cost.
B)  engineered cost.
C)  managed cost.
D)  programmed cost.
E)  committed cost.

Question 10

Which of the following costs exhibits both decreasing and increasing marginal costs over a specific range of activity?

Accepted Answer

A)  Semivariable cost.
B)  Curvilinear cost.
C)  Step-fixed cost.
D)  Step-variable cost.
E)  Fixed cost.

Question 11

Wesley Enterprises has determined that three variables play a key role in determining company revenues.To arrive at an objective forecast of revenues for the next accounting period,Wesley should use:

Accepted Answer

A)  simple regression.
B)  multiple regression.
C)  a scatter diagram.
D)  complex regression.
E)  the high-low method. B

Question 12

The relationship between cost and activity is termed:

Accepted Answer

A)  cost estimation.
B)  cost prediction.
C)  cost behavior.
D)  cost analysis.
E)  cost approximation.

Question 13

On the basis of this information,what were total maintenance costs when the company experienced 23,000 machine hours?

Accepted Answer

A)  $193,200.
B)  $550,000.
C)  $734,800.
D)  $743,200.
E)  $760,000.

Question 14

The cost types shown above are identified by behavior as:

Accepted Answer

A)  Choice A
B)  Choice B
C)  Choice C
D)  Choice D
E)  Choice E

Question 15

Which of the following costs changes in direct proportion to a change in the activity level?

Accepted Answer

A)  Variable cost.
B)  Fixed cost.
C)  Semivariable cost.
D)  Step-variable cost.
E)  Step-fixed cost.

Question 16

Which of the following would not typically be classified as a discretionary fixed cost?

Accepted Answer

A)  Equipment depreciation.
B)  Employee development (education) programs.
C)  Advertising.
D)  Outlays for research and development.
E)  Charitable contributions. A

Question 17

On the basis of this information,the fixed cost was:

Accepted Answer

A)  $184,800.
B)  $210,000.
C)  $550,000.
D)  $734,800.
E)  $760,000.

Question 18

Which of the following methods of cost estimation relies on only two data points?

Accepted Answer

A)  Least-squares regression.
B)  The high-low method.
C)  The visual-fit method.
D)  Account analysis.
E)  Multiple regression.

Question 19

The variable utilities cost per machine hour is:

Accepted Answer

A)  $0.18.
B)  $4.50.
C)  $5.00.
D)  $5.50.
E)  an amount other than those listed abovE.

Question 20

A forecast of a cost at a particular level of activity is termed:

Accepted Answer

A)  cost estimation.
B)  cost prediction.
C)  cost behavior.
D)  cost analysis.
E)  cost approximation.

Exam 6: Activity Analysis,cost Behavior,and Cost Estimation

If Yang produces 10,000 units,the total cost would be:

Correct AnswerverifiedShow Answer

When graphed,a typical fixed cost appears as:

Correct AnswerverifiedShow Answer

Costs that remain the same over a wide range of activity,but jump to a different amount outside that range,are termed:

Correct AnswerverifiedA

Within the relevant range of activity,costs:

Correct AnswerverifiedShow Answer

A review of Parrish Corporation's accounting records found that at a volume of 90,000 units,the variable and fixed cost per unit amounted to $8 and $4,respectively.On the basis of this information,what amount of total cost would Parrish anticipate at a volume of 85,000 units?

Correct AnswerverifiedShow Answer

Costs that result from a company's ownership or use of facilities and its basic organizational structure are termed:

Correct AnswerverifiedShow Answer

Mastel Company has a variable selling cost.If sales volume increases,how will the total variable cost and the variable cost per unit behave?

Correct AnswerverifiedShow Answer

The relevant range is that range of activity:

Correct AnswerverifiedShow Answer

A variable cost that has a definitive physical relationship to the activity measure is called a(n) :

Correct AnswerverifiedShow Answer

Which of the following costs exhibits both decreasing and increasing marginal costs over a specific range of activity?

Correct AnswerverifiedShow Answer

Wesley Enterprises has determined that three variables play a key role in determining company revenues.To arrive at an objective forecast of revenues for the next accounting period,Wesley should use:

Correct AnswerverifiedB

The relationship between cost and activity is termed:

Correct AnswerverifiedShow Answer

On the basis of this information,what were total maintenance costs when the company experienced 23,000 machine hours?

Correct AnswerverifiedShow Answer

The cost types shown above are identified by behavior as:

Correct AnswerverifiedShow Answer

Which of the following costs changes in direct proportion to a change in the activity level?

Correct AnswerverifiedShow Answer

Which of the following would not typically be classified as a discretionary fixed cost?

Correct AnswerverifiedA

On the basis of this information,the fixed cost was:

Correct AnswerverifiedShow Answer

Which of the following methods of cost estimation relies on only two data points?

Correct AnswerverifiedShow Answer

The variable utilities cost per machine hour is:

Correct AnswerverifiedShow Answer

A forecast of a cost at a particular level of activity is termed:

Correct AnswerverifiedShow Answer

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A

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B

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A

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