# Gb519 unit 3 quiz

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`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)
Is mathematical.
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)
Independent variable.
Dependent variable.
Cost object
Outlier.
Dummy variable.

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.

6. In
measuring the variable cost per unit, CVP analysis includes: (Points : 2)
Only
variable production costs.
Only
variable distribution and selling costs.
Both variable production and
variable selling/distribution costs.
Only
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.
Not-for-profit organizations,
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)
An
activity-based cost (ABC) income statement.
A contribution income statement.
An
absorption costing income statement.
A
flexible-budget income statement.
A
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)
Capital budget.

Financial budget.

Financial flows budget.
Cash budget.
Cash
receipts budget.

Question 10. 10.
Which of the following factors is least likely to be considered in
preparing a sales budget? (Points : 2)
Plant
capacity.

General economic and industry conditions.
Past
sales volume.
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)
Goal congruency.
Resource capacity planning.
Participative budgeting.
Budgetary slack.

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)
\$72,000.
\$66,000.
\$55,200.
\$61,200.
\$43,200.

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)
\$4.00.
\$5.42.
\$5.82.
\$6.00.

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)
\$952.94.
\$909.00.
\$936.67.
\$971.25.
```

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# GB519: Unit 3 Quiz

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1. Question
: The R-squared in a
satisfactory regression should be:

less than .3

greater than .3

less than .7

greater than .7

Question 2. Question
: Which of the following is not
one of the main issues regarding data collection which can significantly affect
precision and reliability when using regression or any other cost estimation
method?

Data accuracy.

Time period choice.

Nonlinearity.

Relevant range.

Question 3. Question
: A range around the regression
line within which the management accountant can rely that the actual value of
the predicted cost will fall is referred to as:

A relevant range.

A goodness of fit.

A confidence interval.

A t-value

A p-value.

Question 4. Question
: Which of the following is
required for multiple regression?

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 5. Question
: The CVP profit-planning model
assumes that over the relevant range of activity:

Only revenues are linear.

Only revenues and fixed costs are linear.

Only revenues and variable costs are linear.

Variable cost per unit decreases because of
increases in productivity.

Both revenues and total costs are linear.

Question 6. Question
: The breakeven point is:

The sales volume at which revenues equal
total cost plus an operating profit of zero.

The sales volume at which revenues equal
variable cost and profit is zero.

The sales volume at which revenues equal
fixed cost and profit is zero.

The point at which revenues meet the budget
target.

The sales volume at which the total
contribution margin exceeds total variable costs.

Question 7. Question
: Cost-volume-profit (CVP)
relationships that are curvilinear may be analyzed linearly by considering
only:

Fixed and semi-variable costs.

Relevant fixed costs.

Relevant variable costs.

A relevant range of volume.

The multi-product/multi-service context.

Question 8. Question
: The contribution income
statement would require a firm to:

Separate costs into fixed and variable
categories.

Separate revenue into different categories.

Round off amounts to the nearest dollar.

Ignore some estimated fixed expenses, such as
depreciation, that don’t involve a cash outlay.

Restructure its accounting system to
accommodate activity-based costing

Question 9. Question
: Sales forecasting by its
nature is:

Precise.

Deterministic in nature.

Objective.

Somewhat subjective.

Mechanical.

Question 10. Question
: “Budgetary slack”
occurs when:

Employees refuse to adhere to budgeted plans
and operations.

The budget is so difficult to meet that
employees slack-off from work.

An authoritative, or imposed, budgeting
process is used.

In order to “meet” budget
objectives, employees ask for resources in excess of what they need.

Employees ask for fewer resources than they
need, in order to continuously improve.

Question 11. Question
: A master budget is typically
prepared for:

A period of one year.

Top management only.

Strategic planning purposes only.

Operating activities only.

Question 12. Question
: Which of the following factors
is least likely to be considered in preparing a sales budget?

Plant capacity.

General economic and industry conditions.

Past sales volume.

The cash budget.

Proposed selling expenses.

Question 13. Question
: Stylish Sitting is a retailer
of office chairs located in San Francisco, California. Due to increased market
competition, the CFO of Stylish Sitting has grown worried about the firm’s
upcoming income stream. The CFO asked you to use the company financial
information provided below.

Sales Price \$75.00

Per Unit Variable Costs:

Invoice
Cost 41.70

Sales
Commission 18.30

Total Per Unit Variable Cost \$60.00

Fixed Costs:

Rent
78,000

Salaries 226,000

Total Annual Fixed Costs \$360,000

If 40,000 office chairs were sold, Stylish Sitting’s
operating income would be:

\$240,000.

\$280,000.

\$210,000.

\$340,000.

\$120,000.

Question 14. Question
: Thompson Refrigerators Inc.
needs to prepare pro forma financial statements for the next fiscal year. To do
so, the company must forecast its total overhead cost. The actual machine hours
and total overhead cost are presented below for the past six months.

MONTH
TOTAL O/H MACHINE
HOURS

Jan \$ 8,258 2,134

Feb 8,006 2,045

Mar 8,387 2,276

Apr 8,832 2,743

May 8,921 2,834

June 7,841 2,034

Using the high-low method, unit variable overhead cost is
calculated to be:

\$1.35.

\$1.15

\$1.40.

\$1.65.

\$1.25.

Question 15. Question
: 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):

\$952.94.

\$909.00.

\$936.67.

\$971.25.

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