Question :
MULTIPLE CHOICE.
Choose the one alternative that best completes the statement : 1196055
MULTIPLE CHOICE.
Choose the one alternative that best completes the statement or answers the question. 21)
Which of the following is an equation of a variable cost function? 21)
______ A)
Y = ax + bx B)
Y = bx C)
Y = a D)
Y = b E)
Y = a + bx
22)
Which of the following describes the intercept in a linear cost function? 22)
______ A)
the component of fixed costs that, within the relevant range, does not vary with changes in the level of the cost driver B)
the component of variable costs that, within the relevant range, does vary with changes in the level of the cost driver C)
the component of variable costs that, within the relevant range, does not vary with changes in the level of the cost driver D)
the component of fixed costs that, within the relevant range, does vary with changes in the level of the cost driver E)
the sum of the components of both fixed and variable costs that, within the relevant range, do not vary with changes in the level of the cost driver
23)
Which of the following statements about a high correlation between two variables s and t is FALSE? 23)
______ A)
s may cause t B)
t may cause s. C)
The correlation may be due to random chance. D)
The correlation establishes an economically plausible relationship between costs and their cost drivers. E)
They both may be affected by a third variable.
24)
Brandt Cheque Encoders employs 30 individuals. Ten employees are paid $10 per hour for 173 hours a month and the rest are salaried employees paid $6,000 a month. How would total costs of personnel be classified? 24)
______ A)
variable and fixed B)
a mixed cost C)
a variable cost within a relevant range D)
a fixed cost within a relevant range E)
a fixed cost
25)
For April, the month just ended, the cost components to make tapes were $2 per tape plus fixed costs of $10,000. One thousand tapes were produced. For May the cost to make tapes will be $2.20 per tape plus fixed costs of $10,000. Fifteen hundred tapes are expected to be produced. What are the estimates for the intercept and slope coefficient for May, respectively? 25)
______ A)
$2.00 and $10,000.00 B)
$2.20 and $10,000.00 C)
$22,000 and $10,000 D)
$10,000.00 and $2.20 E)
$10,000.00 and $2.00
26)
The cost function y = 1,000 + 5X 26)
______ A)
has a slope coefficient of 1,000. B)
represents a fixed cost. C)
is a straight line. D)
has an intercept of 5.
27)
Which of the following statements related to assumptions about estimating linear cost functions is FALSE? 27)
______ A)
Variations in a single cost driver explain variations in total costs. B)
The relevant range is the range of the cost object in which a specific relationship exists between fixed and variable costs. C)
A linear function approximates cost behaviour within the relevant range of the cost driver. D)
A cost object is anything for which a separate measurement of costs is desired. E)
The graph of total costs versus a single cost driver forms a straight line within the relevant range
28)
Which of the following does NOT represent a cause-and-effect relationship? 28)
______ A)
A company is charged 40 cents for each brochure printed and mailed. B)
The number of phone minutes used determines the cost of the lines. C)
Material costs increase as the number of units produced increases. D)
It makes sense that if a complex product has a large number of parts it will take longer to assemble than a simple product with fewer parts. E)
Utility costs increase at the same time that insurance costs increase.
29)
All of the following are approaches to cost estimation EXCEPT 29)
______ A)
quantitative analysis. B)
the industrial-engineering method. C)
the account analysis method. D)
the conference method. E)
the flexible cost analysis method.
30)
Which of the following statements about the cost estimation methods is FALSE? 30)
______ A)
There are four methods generally used for cost estimation. B)
The methods are not mutually exclusive. C)
The methods require more historical data than most quantitative analyses. D)
With the conference method, the accuracy of the cost estimates largely depends on the accuracy and details of the inputs. E)
Many organizations use a combination of the approaches.
