1. Which of the following is required for multiple regression? (Points : 2)
The use of dummy variables.
The use of more than one cost driver.
The use of more than one dependent variable.
The use of a trend variable.
The use of multiple sets of data.
Question 2. 2. Regression analysis is better than the high-low method of cost estimation because regression analysis: (Points : 2)
Can provide greater precision and reliability.
Fits data into a mathematical equation.
Takes less time.
Is a statistical method.
Question 3. 3. In least squares regression analysis, the cost to be estimated is the: (Points : 2)
Question 4. 4. Accurate cost estimates are required by strategic management for all except: (Points : 2)
To facilitate strategic positioning analysis.
To facilitate target costing and life-cycle costing.
To facilitate value-chain analysis.
Accounting internal control.
Question 5. 5. A relatively low margin of safety ratio (MOS%) for a product is usually an indication that the product: (Points : 2)
Is losing money.
Has a high contribution margin.
Is riskier than a product with a higher margin of safety ratio.
Is less risky than a product with a higher margin of safety ratio.
Requires heavy fixed cost to produce or sell.
measuring the variable cost per unit, CVP analysis includes: (Points : 2)
variable production costs.
variable distribution and selling costs.
Both variable production and
variable selling/distribution costs.
variable and semi-variable production costs.
Question 7. 7.
Which of the following can use cost/volume/profit (CVP) analysis?
(Points : 2)
Not-for-profit organizations, but not service firms.
Service firms, but not organizations that are not-for-profit.
service firms, and manufacturers.
Manufacturing firms, but not service firms.
Question 8. 8.
The form of the income statement that is used in CVP analysis is
referred to as: (Points : 2)
activity-based cost (ABC) income statement.
A contribution income statement.
absorption costing income statement.
flexible-budget income statement.
segment profitability report.
Question 9. 9.
A plan that shows the cash balance on hand at the beginning of a budget
period, expected cash flow from operations, cash flows from investing
activities, cash flows from financing activities, and an ending cash balance is
called a(n): (Points : 2)
Financial flows budget.
Question 10. 10.
Which of the following factors is least likely to be considered in
preparing a sales budget? (Points : 2)
General economic and industry conditions.
The cash budget.
Proposed selling expenses.
11. The type of compensation plan that focuses on the difference between actual performance (sales, operating income, etc.) and budgeted performance is refers to: (Points : 2)
The use of flexible budgets for performance evaluation.
The use of the master budget for performance evaluation.
The use of "rolling financial forecasts."
The use of a fixed-performance contract.
The use of a Kaizen forecast.
Question 12. 12. The practice of managers knowingly including a higher amount of expenditures (or lower amount of revenue) in the budget than they actually believe will occur is called: (Points : 2)
Resource capacity planning.
Question 13. 13. Brownsville Novelty Store prepared the following budget information for the month of May:
â€¢ Sales are budgeted at $360,000. All sales are on account and a provision for bad debts is made
monthly at three percent of sales.
â€¢ Inventory was $84,000 on April 30 and an increase of $12,000 is planned for May 31.
â€¢ All inventory is marked to sell at cost plus fifty percent.
â€¢ Estimated cash disbursements for selling and administrative expenses for the month are $48,000.
â€¢ Depreciation for May is projected at $6,000.
Brownsville's budgeted operating income for May is: (Points : 2)
Question 14. 14. Jackson, Inc. is preparing a budget for the coming year and requires a breakdown of the cost of electrical power used in its factory into the fixed and variable elements. The following data on the cost of power used and direct labor hours worked are available for the last six months of this year:
Month $ for Power DL Hours
July $ 15,850 3,000
Aug 13,400 2,050
Sept 16,370 2,900
Oct 19,800 3,650
Nov 17,600 2,670
Dec 18,500 2,650
Total $101,520 16,920
Assuming that Jackson uses the high-low method of analysis, the estimated variable cost of steam per direct labor hour is: (Points : 2)
Question 15. 15. CalcuCo hired Effner & Associates to design a new computer-aided manufacturing facility. The new facility was designed to produce 300 computers per month. The variable costs for each computer are $660 and the fixed costs total $74,700 per month. The average cost per unit, if the facility normally expects to operate at eighty-five percent of capacity, is calculated to be (round to nearest cent): (Points : 2)