Ch 6 Acctg

Which of the following statements about the visual-fit method is (are) true? I. The method results in the creation of a scatter diagram. II. The method is not totally objective because of the manner in which the cost line is determined. III. The method is especially helpful in the determination of outliers.

E. I, II, and III.

When graphed, a typical variable cost appears as

E. Nike

A high R2

E. all of the preceding statements are true.

C. cost behavior

The relationship between cost and activity is termed

Bowman

A

Package express

A

Parker Corporation

A

Song, Inc. On the basis of this information, the variable cost per machine hour was:

A

Swanson's

A

Swanson's monthly fixed fee is:

A

B. cost prediction

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

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

A. Equipment depreciation.

When graphed, a typical fixed cost appears as:

A. a horizontal line.

Within the relevant range of activity, costs:

A. can be estimated

Property taxes

A. committed fixed cost.

A mixed cost is often known as a

A. semivariable cost.

Within the relevant range, a curvilinear cost function can sometimes be graphed as a:

A. sloping straight line.

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

A. step-fixed costs.

Around town

B

Hot'lanta The fixed utilities cost per month is

B

Mastel Company

B

Northlake, Inc

B

Parrish

B

Wesley Enterprises

B

Wooster

B

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

B. Curvilinear cost.

Which of the following is (are) example(s) of a mixed cost? I. A building that is used for both manufacturing and sales activities. II. An employee's compensation, which consists of a flat salary plus a commission. III. Depreciation that relates to five different machines. IV. Maintenance cost that must be split between sales and administrative offices.

B. II only.

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

B. The high-low method.

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

B. committed fixed costs.

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

B. engineered cost.

DuChien

C

How much would Swanson's pay if it made 5,500 copies?

C

Normal Company

C

Song, Inc. On the basis of this information, the fixed cost was:

C

Temperance

C

Which of the following tools is not associated with cost estimation?

C. Inversion equations.

A company observed a decrease in the cost per unit. All other things being equal, which of the following is probably true?

C. The company is studying a fixed cost, and total volume has increased.

When graphed, a typical step-fixed cost appears as

C. a series of staggered horizontal lines

Committed fixed costs would include:

C. depreciation on buildings and equipment.

charitable contributions

C. discretionary fixed cost.

Straight-line depreciation is a typical example of a:

C. fixed cost.

A cost that has both a fixed and variable component is best termed a:

C. semivariable cost.

The nonstatistical method of cost estimation that calls for the creation of a scatter diagram is the:

C. visual-fit method.

The relevant range is that range of activity

C. where management expects the firm to operate.

Hot'lanta The variable utilities cost per machine hour is

D

Hot'lanta Using the high-low method, the utilities cost associated with 980 machine hours would be:

D

Rachelle

D

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

D

Whitmere Corporation

D

Which of the following techniques is not used to analyze cost behavior?

D. Linear programming.

Which of the following is not an example of a committed fixed cost?

D. Outlays for advertising programs.

The high-low method and least-squares regression are used by accountants to:

D. estimate costs.

Booster

E

Chesley Corporation

E

Davisson's production

E

Which of the following is not an issue in the collection of data for cost estimation?

E. All of these are issues in data collection.

A. Variable cost

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