CHAPTER 10 QUIZ
A mixed cost function has a constant component of $20,000. If the total cost is $60,000 and the independent variable has the value 200, what is the value of the slope coefficient? a.
[CMA Adapted] Of the following methods, the one that would not be appropriate for analyzing how a specific cost behaves is a.
the scattergraph method.
the industrial engineering approach.
statistical regression analysis.
When the high-low method is used to estimate a cost function, the variable cost per unit is found by a.
performing regression analysis on the associated cost and cost driver database. b.
subtracting the fixed cost per unit from the total cost per unit based on either the highest or lowest observation of the cost driver. c.
dividing the difference between the highest and lowest observations of the cost driver by the difference between costs associated with the highest and lowest observations of the cost driver. d.
dividing the difference between costs associated with the highest and lowest observations of the cost driver by the difference between the highest and lowest observations of the cost driver.
The following data apply to questions 4 and 5.
Tory Company derived the following cost relationship from a regression analysis of its monthly manufacturing overhead cost.
y = $80,000 + $12X
y = monthly manufacturing overhead cost X = machine-hours
The standard error of estimate of the regression is $6,000.
The standard time required to manufacture one six-unit case of Tory’s single product is four machine-hours. Tory applies manufacturing overhead to production on the basis of machine-hours, and its normal annual production is 50,000 cases.
[CMA Adapted] Tory’s estimated variable manufacturing overhead cost for a month in which scheduled production is 10,000 cases would be a.
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