Question : 13) The high-low method ________. A) measures the difference between actual : 1211737

 

13) The high-low method ________.

A) measures the difference between actual cost and estimated cost for each observation of the cost driver

B) calculates the standard deviation of residuals

C) calculates the slope coefficient using only two observed values within the relevant range and their respective costs

D) measures how well the predicted values, y, based on the cost driver, X, match actual cost observations, Y

 

14) Put the following steps in order for using the high-low method of estimating a cost function:

 

A = Identify the cost function

B = Calculate the constant

C = Calculate the slope coefficient

D = Identify the highest and lowest observed values

 

A) D C A B

B) C D A B

C) A D C B

D) D C B A

15) Regression analysis ________.

A) calculates the slope coefficient using only two observed values within the relevant range and their respective costs

B) measures the average amount of change in the dependent variable associated with a unit change in one or more independent variables

C) estimates the cost functions using the time-and-motion studies

D) measures the variability or dispersion in a set of data points

 

16) Which of the following statements shows a difference between simple regression and multiple regression?

A) Simple regression uses more than one dependent and independent variables, whereas multiple regression uses only one dependent and independent variable.

B) Simple regression uses only the independent variables, whereas multiple regression uses only dependent variables.

C) Simple regression uses only one dependent and one independent variable, whereas multiple regression uses one dependent and more than one independent variable.

D) Simple regression uses only one dependent variable and more than one independent variables, whereas multiple regression uses more than one dependent variable and only one independent variable.

 

17) The slope of the line of regression is the ________.

A) rate at which the dependent variable varies

B) rate at which the independent variable varies

C) difference between the fixed cost and variable cost associated with the cost driver

D) difference between actual cost and estimated cost for each observation of the cost driver

Answer the following questions using the information below:

 

Uninder Company uses the high-low method to estimate the cost function. The information for 2015 is provided below:

Machine-hoursLabor Costs

Highest observation of cost driver550$22,000

Lowest observation of cost driver250$ 13,000

 

18) What is the slope coefficient?

A) $52.00

B) $43.75

C) $30.00

D) $40.00

 

19) What is the constant for the estimated cost equation?

A) $5,500

B) $13,000

C) $16,500

D) $22,000

 

20) What is the estimated cost function for the above data?

A) y = 13,000 + 43.75X

B) y = 5,500 + 30X

C) y = 22,000 + 40X

D) y = 16,500 + 52X

 

21) What is the estimated total cost when 400 machine-hours are used?

A) $20,800

B) $29,000

C) $16,000

D) $17,500

Answer the following questions using the information below:

 

Syosis Company uses the high-low method to estimate its cost function. The information for 2015 is provided below:

 

Machine-hours Costs

Highest observation of cost driver2,500$300,000

Lowest observation of cost driver1,500$ 220,000

 

22) What is the slope coefficient?

A) $120.00

B) $147.00

C) $80.00

D) $130.00

 

 

 

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