Question : 3) How many separate cost pools should be formed given : 1211756

3) How many separate cost pools should be formed given the following information?

CostCost driver

Postage costs# of brochures mailed

Printing and paper costs# of brochures mailed

Quality control costs# of inspections

Customer service costs# of customers served

A) 1 cost pool

B) 2 cost pools

C) 3 cost pools

D) 4 cost pools

4) Place the following steps in order for estimating a cost function using quantitative analysis.

A = Plot the data

B = Collect data on the dependent variable and the cost driver.

C = Choose the dependent variable

D = Identify the independent variable, or cost driver

E = Estimate the cost function

A) D C E A B

B) C D B A E

C) A D C E B

D) E D C B A

5) All individual cost items included in the dependent variable should have ________.

A) a different cost driver

B) an independent relationship with the independent variable

C) an economically plausible relationship with the cost driver

D) a heterogeneous cost pool

6) Which of the following represents cross-sectional data?

A) indirect manufacturing labor costs for the past 5 years

B) number of machine-hours used for the past 10 years

C) personnel costs of a month at 10 different organizations

D) maintenance cost of machine in a plant for the past 3 years

7) A plot of data that results in bunched points with little slope generally indicates ________.

A) a strong relationship

B) a weak relationship

C) a positive relationship

D) a negative relationship

8) A plot of data that results in one extreme observation most likely indicates that ________.

A) more than one cost pool should be used

B) an unusual event such as a plant shutdown occurred during that month

C) the cost-allocation base has been incorrectly identified

D) individual cost items do not have the same cost driver

9) Cross-sectional data analysis includes ________.

A) using a variety of time periods to measure the dependent variable

B) using the highest and lowest observation

C) observing different entities during the same time period

D) comparing information in different cost pools

10) Time-series data analysis includes ________.

A) using a variety of time periods to measure the dependent variable

B) using the highest and lowest observation

C) observing different entities during the same time period

D) comparing information in different cost pools

11) When using the high-low method, the two observations used are the high and low observations of the ________.

A) cost driver

B) fixed cost component

C) slope coefficient

D) direct cost

12) When using the high-low method, the numerator of the equation that determines the slope is the ________.

A) difference between the positive and negative values of dependent and independent variables

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

C) difference between the high and low observations of the cost driver

D) difference between the costs associated with highest and lowest observations of the cost driver