Thursday, June 30, 2011

Michigan has an abundant supply of fresh water

ECONOMICS

Multiple Choice

Michigan has an abundant supply of fresh water. However, an economist would consider it a scarce resource because

a.water is necessary for humans' physical survival

b.pollution will eventually destroy all life in the Great Lakes

c.water is limited relative to people's unlimited wants

d.water commands a very high price

e.nature can destroy water as well as create it

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Economics is best described as the

ECONOMICS

Multiple Choice

Economics is best described as the

a.study of choice when scarcity exists

b.study of the production of goods and services

c.theory of consumer behavior

d.science of money

e.art of spending money wisely

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2. Economics is the study of

ECONOMICS

Multiple Choice

Economics is the study of

a.how the human race differs from other species

b.how individuals amass personal fortunes in the stock market

c.how individuals and nations deal with the problem of scarcity

d.role that money plays in the economy

e.how goods and services are distributed throughout the world

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Which of the following is the best definition of economics?

ECONOMICS

Multiple Choice

Which of the following is the best definition of economics?

a.An investigation of the quantities and prices of the various goods produced by the nations of the world.

b.A study of why inflation and unemployment periodically plague the U.S. economy.

c.An analysis of how individuals and societies deal with the problem of scarcity.

d.An examination of the role that money plays in the economy.

e.A study of how goods and services are distributed throughout the world.

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Economics is the study of

ECONOMICS

Multiple Choice

Economics is the study of

a.how to get rich by playing the stock market

b.the best ways to reduce people's wants, given the scarcity of resources

c.how rational government officials determine what goods should be produced

d.money and why it is good

e.how people use limited resources to try to satisfy unlimited wants

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Economics is best defined as the study of how

ECONOMICS

Multiple Choice

Economics is best defined as the study of how

a.individuals decide to use scarce resources in an attempt to satisfy their unlimited wants

b.to make money

c.the government should deal with unemployment and inflation

d.to eliminate the problem of scarce resources

e.to run a business

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Some individuals or families can become completely saturated with a service such as television

ECONOMICS

Multiple Choice

Some individuals or families can become completely saturated with a service such as television. This suggests that

a.wants are limited

b.desires for a single commodity can be satisfied but then the focus will switch to other goods and services

c.a highly productive economy may someday be able to satisfy all human desires

d.resources are not truly fixed in supply as we generally assume

e.scarcity does not exist

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Wednesday, June 29, 2011

Which of the following statements regarding the basic economic problem of scarcity is correct?

ECONOMICS

Multiple Choice

Which of the following statements regarding the basic economic problem of scarcity is correct?

a.The problem only exists in countries that are not highly industrialized.

b.The problem is likely to disappear as production increases.

c.The problem is sure to disappear as technology improves.

d.The problem will exist as long as resources are available in limited amounts.

e.The problem will disappear as a person's income falls.

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Because people's wants are unlimited but resources are scarce,

ECONOMICS

Multiple Choice

Because people's wants are unlimited but resources are scarce,

a.only the rich get everything they want

b.choices must be made

c.there will be more services produced than goods

d.people search for spiritual fulfillment rather than material fulfillment

e.poor people never get anything they want

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Scarcity

ECONOMICS

Multiple Choice

Scarcity

a.exists because people have wants that are unlimited relative to the availability of resources to satisfy those wants

b.applies when a resource is not freely available

c.means that each society and each individual must make choices

d.exists in all societies

e.all of the above are true

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Scarcity is best defined as

ECONOMICS

Multiple Choice

Scarcity is best defined as

a.unlimited resources

b.a shortage -- when buyers cannot obtain the goods they want

c.a surplus -- when sellers cannot sell the goods they produce

d.insufficient resources to satisfy unlimited wants

e.the private ownership of society's resources

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The problem of scarce resources

ECONOMICS

Multiple Choice

The problem of scarce resources

a.means that in some cities there are not enough jobs

b.could be solved if the unemployment rate fell

c.is that there are not enough resources to satisfy people's unlimited wants

d.is that resources are used inefficiently

e.can be solved by lowering taxes

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The fact that people have unlimited wants means that

ECONOMICS

Multiple Choice

The fact that people have unlimited wants means that

a.they always want more of at least one good

b. each person has an unlimited desire for every good

c. labor unions demand wage increases

d. selfish people are not concerned about others

e. people buy goods without regard to what they can afford

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Rent is the payment received by resource owners for the use of their natural resources

ECONOMICS

Multiple Choice

Rent is the payment received by resource owners for the use of their natural resources.

a.True

b.False

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Profit is the payment received by resource owners for the use of their capital

ECONOMICS

Multiple Choice

Profit is the payment received by resource owners for the use of their capital.

a.True

b.False

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In economics, money is an example of capital

ECONOMICS

Multiple Choice

In economics, money is an example of capital.

a.True

b.False

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Economics studies how decision makers use scarce resources to satisfy unlimited wants

ECONOMICS

Multiple Choice

Economics studies how decision makers use scarce resources to satisfy unlimited wants

a.True

b.False

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Economics is best defined as the study of how individuals decide to use limited resources in an attempt to satisfy unlimited wants

ECONOMICS

Multiple Choice

Economics is best defined as the study of how individuals decide to use limited resources in an attempt to satisfy unlimited wants.

a.True

b.False

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How is the cost function stated?

ACCOUNTING

Multiple Choice

The Gangwere Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Gangwere Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.



The Gangwere Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Gangwere Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.



Month Cost Hours

January $40,000 3,500

February 24,400 2,000

March 31,280 2,450

April 36,400 3,000

May 44,160 3,900

June 42,400 3,740



How is the cost function stated?

a. y = $26,672 + $1.84X

b. y = $21,360 + $1.52X

c. y = $10,112 + $8.64X

d. y = $3,600 + $10.40X

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What is the estimated total cost at an operating level of 5,000 units?

ACCOUNTING

Multiple Choice

Presented below are the production data for the first six months of the year for the mixed costs incurred by Gallup Company.



Month Cost Units

January $4,890 4,100

February 4,024 3,200

March 6,480 5,300

April 8,840 7,500

May 5,800 4,800

June 7,336 6,600



Gallup Company uses the high-low method to analyze mixed costs.


What is the estimated total cost at an operating level of 5,000 units?

a. $6,227.20

b. $6,040.00

c. $4,283.20

d. $8,510.00

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How would the cost function be stated?

ACCOUNTING

Multiple Choice

Presented below are the production data for the first six months of the year for the mixed costs incurred by Gallup Company.



Month Cost Units

January $4,890 4,100

February 4,024 3,200

March 6,480 5,300

April 8,840 7,500

May 5,800 4,800

June 7,336 6,600



Gallup Company uses the high-low method to analyze mixed costs.


How would the cost function be stated?

a. y = $440 + $1.12X

b. y = $3,562.30 + $0.144X

c. y = $107.20 + $1.224X

d. y = $7,850 + $0.132X

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What is the estimated total cost at an operating level of 8,000 hours?

ACCOUNTING

Multiple Choice

The Barnett Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Barnett Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.

Cost Hours

$24,900 5,250

24,000 5,500

36,400 7,500

44,160 9,750

45,000 9,500


What is the estimated total cost at an operating level of 8,000 hours?

a. $43,740

b. $36,670

c. $46,875

d. $37,125

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What is the cost function?

ACCOUNTING

Multiple Choice

The Barnett Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Barnett Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.

Cost Hours

$24,900 5,250

24,000 5,500

36,400 7,500

44,160 9,750

45,000 9,500


What is the cost function?

a. y = $43,191 + $0.19X

b. y = $4,875 + $5.25X

c. y = $41,900 + $0.23X

d. y = $2,430 + $4.28X

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What is the estimate of total labor costs at Carroll Company when 10,000 labor-hours are used?

ACCOUNTING

Multiple Choice

For Carroll Company, labor-hours are 12,500 and wages $47,000 at the high point of the relevant range, and labor-hours are 7,500 and wages $35,000 at the low point of the relevant range.


What is the estimate of total labor costs at Carroll Company when 10,000 labor-hours are used?

a. $17,000

b. $41,000

c. $21,167

d. $27,000

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What is the constant?

ACCOUNTING

Multiple Choice

For Carroll Company, labor-hours are 12,500 and wages $47,000 at the high point of the relevant range, and labor-hours are 7,500 and wages $35,000 at the low point of the relevant range.


What is the constant?

a. $17,000

b. $12,000

c. $5,000

d. $41,750

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What is the slope coefficient per labor-hour?

ACCOUNTING

Multiple Choice

For Carroll Company, labor-hours are 12,500 and wages $47,000 at the high point of the relevant range, and labor-hours are 7,500 and wages $35,000 at the low point of the relevant range.


What is the slope coefficient per labor-hour?

a. $4.67

b. $3.76

c. $2.40

d. $0.42

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Saturday, June 25, 2011

What is the estimate of the total cost when 300 machine-hours are used?

ACCOUNTING

Multiple Choice

The Hunter Company uses the high-low method to estimate the cost function. The information for 20x3 is provided below:

Machine-hours Labor Costs

Highest observation of cost driver 400 $10,000

Lowest observation of cost driver 240 $ 6,800


What is the estimate of the total cost when 300 machine-hours are used?

a. $2,000

b. $4,000

c. $6,000

d. $8,000

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What is the constant for the estimating cost equation?

ACCOUNTING

Multiple Choice

The Hunter Company uses the high-low method to estimate the cost function. The information for 20x3 is provided below:

Machine-hours Labor Costs

Highest observation of cost driver 400 $10,000

Lowest observation of cost driver 240 $ 6,800


What is the constant for the estimating cost equation?

a. $2,000

b. $6,800

c. $8,000

d. $10,000

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What is the slope coefficient per machine-hour?

ACCOUNTING

Multiple Choice

The Hunter Company uses the high-low method to estimate the cost function. The information for 20x3 is provided below:

Machine-hours Labor Costs

Highest observation of cost driver 400 $10,000

Lowest observation of cost driver 240 $ 6,800


What is the slope coefficient per machine-hour?

a. $28.33

b. $00.05

c. $20.00

d. $25.00

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The slope of the line of regression is

ACCOUNTING

Multiple Choice

The slope of the line of regression is

a. the rate at which the dependent variable varies.

b. the rate at which the independent variable varies.

c. the level of total fixed costs.

d. the level of total variable costs.

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Simple regression differs from multiple regression in that

ACCOUNTING

Multiple Choice

Simple regression differs from multiple regression in that

a. multiple regression uses all available data to estimate the cost function, whereas simple regression only uses simple data.

b. simple regression is limited to the use of only the dependent variables and multiple regression can use both dependent and independent variables.

c. simple regression uses only one independent variable and multiple regression uses more than one independent variable.

d. simple regression uses only one dependent variable and multiple regression uses more than one dependent variable.

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Regression analysis

ACCOUNTING

Multiple Choice

Regression analysis

a. is simple to compute.

b. measures the change in a dependent variable associated with one or more independent variables.

c. is mathematical so it does not require an understanding of operations.

d. uses the constant to measure goodness of fit.

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

ACCOUNTING

Multiple Choice

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

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The high-low method

ACCOUNTING

Multiple Choice

The high-low method

a. easily handles estimating the relationship between the dependent variable and two or more independent variables.

b. is more accurate than the regression method.

c. calculates the slope coefficient using only two observed values within the relevant range.

d. uses the residual term to measure goodness of fit.

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When using the high-low method, the two observations used are the high and low observations

ACCOUNTING

Multiple Choice

When using the high-low method, the two observations used are the high and low observations

a. of the cost driver.

b. of the dependent variables.

c. of the slope coefficient.

b. of the residual term.

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Time-series data analysis includes

ACCOUNTING

Multiple Choice

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.

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Cross-sectional data analysis includes

ACCOUNTING

Multiple Choice

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.

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A plot of data that results in bunched points with little slope generally indicates

ACCOUNTING

Multiple Choice

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.

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Collecting data on the dependent variable and the cost driver may include

ACCOUNTING

Multiple Choice

Collecting data on the dependent variable and the cost driver may include

a. interviews with managers.

b. collecting data over a long period of time.

c. collecting data from different entities over the same period of time.

d. all of the above.

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All individual cost items included in the dependent variable should

ACCOUNTING

Multiple Choice

All individual cost items included in the dependent variable should

a. have the same cost driver.

b. have a cause-and-effect relationship with the independent variable.

c. have an economically plausible relationship with the independent variable.

d. include all of the above.

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Place the following steps in order for estimating a cost function using quantitative analysis:

ACCOUNTING

Multiple Choice

Place the following steps in order for estimating a cost function using quantitative analysis:

A = Plot the data

B = Estimate the cost function

C = Choose the dependent variable

D = Identify the cost driver

a. D C A B

b. C D A B

c. A D C B

d. D C B A

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How many separate cost pools should be formed given the following information:

ACCOUNTING

Multiple Choice

How many separate cost pools should be formed given the following information:

Cost Cost 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

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The independent variable

ACCOUNTING

Multiple Choice

The independent variable

a. is also referred to as the cost driver

b. may also be called the cost-allocation base if referring to an indirect cost

c. should have an economically plausible relationship with the dependent variable

d. includes all of the above

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The cost to be predicted is referred to as the

ACCOUNTING

Multiple Choice

The cost to be predicted is referred to as the

a. independent variable

b. dependent variable

c. cost driver

d. regression

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Which cost estimation method is being used by Penny’s TV and Appliance Store?

ACCOUNTING

Multiple Choice

Penny’s TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 20x3 operations.



Sales (2,000 televisions) $ 900,000

Cost of goods sold 400,000

Store manager's salary per year 70,000

Operating costs per year 157,000

Advertising and promotion per year 15,000

Commissions (4% of sales) 36,000


Which cost estimation method is being used by Penny’s TV and Appliance Store?

a. The industrial engineering method

b. The conference method

c. The account analysis method

d. The quantitative analysis method

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What are the estimated total costs if Penny’s expects to sell 3,000 units next year?

ACCOUNTING

Multiple Choice

Penny’s TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 20x3 operations.



Sales (2,000 televisions) $ 900,000

Cost of goods sold 400,000

Store manager's salary per year 70,000

Operating costs per year 157,000

Advertising and promotion per year 15,000

Commissions (4% of sales) 36,000



What are the estimated total costs if Penny’s expects to sell 3,000 units next year?

a. $896,000

b. $678,000

c. $1,017,000

d. $799,000

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Thursday, June 23, 2011

What were total fixed costs for 20x3?

ACCOUNTING

Multiple Choice

Penny’s TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 20x3 operations.


Sales (2,000 televisions) $ 900,000

Cost of goods sold 400,000

Store manager's salary per year 70,000

Operating costs per year 157,000

Advertising and promotion per year 15,000

Commissions (4% of sales) 36,000


What were total fixed costs for 20x3?

a. $678,000

b. $436,000

c. $242,000

d. $227,000

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What was the variable cost per unit sold for 20x3?

ACCOUNTING

Multiple Choice

Penny’s TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 20x3 operations.


Sales (2,000 televisions) $ 900,000

Cost of goods sold 400,000

Store manager's salary per year 70,000

Operating costs per year 157,000

Advertising and promotion per year 15,000

Commissions (4% of sales) 36,000


What was the variable cost per unit sold for 20x3?

a. $18

b. $218

c. $339

d. $200

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Which cost estimation method is being used by Jordan Company?

ACCOUNTING

Multiple Choice

At the Jordan Company, the cost of the personnel department has always been charged to production departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of new hires might be a better predictor of personnel costs.

Total personnel department costs are $160,000.



Department A B C

Number of employees 30 270 100

The number of new hires 8 12 5


Which cost estimation method is being used by Jordan Company?

a. The industrial engineering method

b. The conference method

c. The account analysis method

d. The quantitative analysis method

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If number of new hires is considered the cost driver, what amount of personnel costs will be allocated to Department A?

ACCOUNTING

Multiple Choice

At the Jordan Company, the cost of the personnel department has always been charged to production departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of new hires might be a better predictor of personnel costs.

Total personnel department costs are $160,000.



Department A B C

Number of employees 30 270 100

The number of new hires 8 12 5


If number of new hires is considered the cost driver, what amount of personnel costs will be allocated to Department A?

a. $12,000

b. $5,333

c. $51,200

d. $20,000

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If number of employees is considered the cost driver, what amount of personnel costs will be allocated to Department A?

ACCOUNTING

Multiple Choice

At the Jordan Company, the cost of the personnel department has always been charged to production departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of new hires might be a better predictor of personnel costs.

Total personnel department costs are $160,000.



Department A B C

Number of employees 30 270 100

The number of new hires 8 12 5



If number of employees is considered the cost driver, what amount of personnel costs will be allocated to Department A?

a. $12,000

b. $5,333

c. $51,200

d. $20,000

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Which cost estimation method may utilize time-and-motion studies to analyze the relationship between inputs and outputs in physical terms?

ACCOUNTING

Multiple Choice

Which cost estimation method may utilize time-and-motion studies to analyze the relationship between inputs and outputs in physical terms?

a. The account analysis method

b. The conference method

c. The industrial engineering method

d. The quantitative analysis method

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Which cost estimation method uses a formal mathematical method to develop cost functions based on past data?

ACCOUNTING

Multiple Choice

Which cost estimation method uses a formal mathematical method to develop cost functions based on past data?

a. The account analysis method

b. The conference method

c. The industrial engineering method

d. The quantitative analysis method

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Which cost estimation method analyzes accounts in the subsidiary ledger as variable, fixed, or mixed using qualitative methods?

ACCOUNTING

Multiple Choice

Which cost estimation method analyzes accounts in the subsidiary ledger as variable, fixed, or mixed using qualitative methods?

a. The account analysis method

b. The conference method

c. The industrial engineering method

d. The quantitative analysis method

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Gathering cost information through observations and interviews from departments within an organization is known as

ACCOUNTING

Multiple Choice

Gathering cost information through observations and interviews from departments within an organization is known as

a. the account analysis method

b. the conference method

c. the industrial engineering method

d. the quantitative analysis method

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Quantitative analysis methods estimate cost functions

ACCOUNTING

Multiple Choice

Quantitative analysis methods estimate cost functions

a. which depend on the experience and judgment of the analyst for accuracy

b. based on analysis and opinions gathered from various departments

c. using significant amounts of historical data

d. using the pooling of knowledge from each value chain function

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The account analysis method estimates cost functions

ACCOUNTING

Multiple Choice

The account analysis method estimates cost functions

a. by classifying cost accounts as variable, fixed, or mixed based on qualitative analysis.

b. using time-and-motion studies.

c. at a high cost, which is therefore seldom used.

d. in a manner that cannot be usefully combined with any other cost estimation methods.

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The conference method estimates cost functions

ACCOUNTING

Multiple Choice

The conference method estimates cost functions

a. using quantitative methods that can be very time consuming and costly.

b. based on analysis and opinions gathered from various departments.

c. using time-and-motion studies.

d. by mathematically analyzing the relationship between inputs and outputs in physical terms.

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The industrial engineering method estimates cost functions

ACCOUNTING

Multiple Choice

The industrial engineering method estimates cost functions

a. based on analysis and opinions gathered from various departments

b. quickly while incurring little cost

c. using qualitative rather than quantitative analysis

d. by analyzing the relationship between inputs and outputs in physical terms

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Which of the following is an equation of a variable cost function?

ACCOUNTING

Multiple Choice

Which of the following is an equation of a variable cost function?

a. y = b

b. y = a + bX

c. y = bX

d. y = a

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The cost function y = 8,000 + 4X

ACCOUNTING

Multiple Choice

The cost function y = 8,000 + 4X

a. represents a mixed cost

b. will intersect the y-axis at 4

c. has a slope coefficient of 8,000

d. is a curved line

d. represents a fixed cost
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The cost function y = 1,000 + 5X

ACCOUNTING

Multiple Choice

The cost function y = 1,000 + 5X

a. has a slope coefficient of 1,000

b. has an intercept of 5

c. is a straight line

d. represents a fixed cost
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A linear cost function can represent

ACCOUNTING

Multiple Choice

A linear cost function can represent

a. mixed cost behaviors

b. fixed cost behaviors

c. variable cost behaviors

d. all of the above cost behaviors

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For January, the cost components of a picture frame include $0.35 for the glass, $.65 for the wooden frame, and $0.80 for assembly

ACCOUNTING

Multiple Choice

For January, the cost components of a picture frame include $0.35 for the glass, $.65 for the wooden frame, and $0.80 for assembly. The assembly desk and tools cost $400. 1,000 frames are expected to be produced in the coming year. What cost function best represents these costs?

a. y = 1.80 + 400X

b. y = 400 +1.80X

c. y = 2.20 + 1,000X

d. y = 1.00 + 400X

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Dougherty Company employs 20 individuals

ACCOUNTING

Multiple Choice

Dougherty Company employs 20 individuals. Eight employees are paid $12 per hour and the rest are salaried employees paid $3,000 a month. How would total costs of personnel be classified?

a. Variable

b. Mixed

c. A variable cost within a relevant range

d. A fixed cost within a relevant range

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Which of the following does NOT represent a cause-and-effect relationship?

ACCOUNTING

Multiple Choice

Which of the following does NOT represent a cause-and-effect relationship?

a. Material costs increase as the number of units produced increases

b. A company is charged 40 cents for each brochure printed and mailed.

c. Utility costs increase at the same time that insurance costs increase

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

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A high correlation between two variables s and t indicates that

ACCOUNTING

Multiple Choice

A high correlation between two variables s and t indicates that

a. s may cause t, or t may cause s

b. they both may be affected by a third variable

c. the correlation may be due to random chance

d. all of the above are true

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Which of the following statements related to assumptions about estimating linear cost functions is FALSE?

ACCOUNTING

Multiple Choice

Which of the following statements related to assumptions about estimating linear cost functions is FALSE?

a. Variations in a single cost driver explain variations in total costs

b. A cost object is anything for which a separate measurement of costs is desired

c. A linear function approximates cost behavior within the relevant range of the cost driver

d. A high correlation between two variables ensures that a cause-and-effect relationship exists

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Generally a coefficient of determination (r2) that is less than 0.30 indicates a goodness of fit

ACCOUNTING

True or False

Generally a coefficient of determination (r2) that is less than 0.30 indicates a goodness of fit

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y = a + bX represents the general form of the linear cost function

ACCOUNTING

True or False

y = a + bX represents the general form of the linear cost function

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The coefficient of determination (r2) measures the percentage of variation in Y explained by X (the independent variable)

ACCOUNTING

True or False

The coefficient of determination (r2) measures the percentage of variation in Y explained by X (the independent variable)

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Inflation is a fact, and therefore its influence should not be removed from the data

ACCOUNTING

True or False

Inflation is a fact, and therefore its influence should not be removed from the data

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Misinterpretation of data can arise when fixed costs are reported on a per unit basis

ACCOUNTING

True or False

Misinterpretation of data can arise when fixed costs are reported on a per unit basis

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Data collection problems can arise when data is recorded manually rather than electronically

ACCOUNTING

True or False

Data collection problems can arise when data is recorded manually rather than electronically

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The incremental unit-time learning model with a 90% learning curve indicates that if it takes 100 minutes to manufacture the first unit of a new model

ACCOUNTING

True or False

The incremental unit-time learning model with a 90% learning curve indicates that if it takes 100 minutes to manufacture the first unit of a new model, then the second unit will take only 90 minutes to manufacture

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The cumulative average-time learning model with a 90% learning curve indicates that if it takes 100 minutes to manufacture the first unit of a new

ACCOUNTING

True or False

The cumulative average-time learning model with a 90% learning curve indicates that if it takes 100 minutes to manufacture the first unit of a new model, then the second unit will take only 90 minutes to manufacture

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It is appropriate to incorporate expected learning-curve efficiencies when evaluating performance

ACCOUNTING

True or False

It is appropriate to incorporate expected learning-curve efficiencies when evaluating performance

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When new products are introduced, learning-curve effects can have a major influence on production scheduling

ACCOUNTING

True or False

When new products are introduced, learning-curve effects can have a major influence on production scheduling

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Plotting learning curve observations is helpful in selecting the appropriate learning curve model

ACCOUNTING

True or False

Plotting learning curve observations is helpful in selecting the appropriate learning curve model

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A learning curve measures the effect of learning on efficiency

ACCOUNTING

True or False

A learning curve measures the effect of learning on efficiency

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An example of a step variable-cost function is the cost of material-handling labor when inputs are acquired in discrete quantities

ACCOUNTING

True or False

An example of a step variable-cost function is the cost of material-handling labor when inputs are acquired in discrete quantities

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Step fixed-cost functions are variable over the long run

ACCOUNTING

True or False

Step fixed-cost functions are variable over the long run

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A step cost function is an example of a nonlinear cost function

ACCOUNTING

True or False

A step cost function is an example of a nonlinear cost function

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Economic plausibility is an important criterion for choosing a cost driver

ACCOUNTING

True or False

Economic plausibility is an important criterion for choosing a cost driver

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When using an activity-based costing system, a batch-level cost must have a batch-level cost driver

ACCOUNTING

True or False

When using an activity-based costing system, a batch-level cost must have a batch-level cost driver

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A flat or slightly sloped regression line indicates a strong relationship

ACCOUNTING

True or False

A flat or slightly sloped regression line indicates a strong relationship

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Choosing an economically plausible cost driver for indirect costs is fairly simple and knowledge of operations is unnecessary

ACCOUNTING

True or False

Choosing an economically plausible cost driver for indirect costs is fairly simple and knowledge of operations is unnecessary

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The smaller the vertical difference between actual costs and predicted costs the better the goodness of fit

ACCOUNTING

True or False

The smaller the vertical difference between actual costs and predicted costs the better the goodness of fit

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Machine-hours is a more economically plausible cost driver of machine maintenance than number of direct manufacturing labor-hours

ACCOUNTING

True or False

Machine-hours is a more economically plausible cost driver of machine maintenance than number of direct manufacturing labor-hours

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If inaccurate cost estimates are too high, then a company may unknowingly reward a manager for poor performance

ACCOUNTING

True or False

If inaccurate cost estimates are too high, then a company may unknowingly reward a manager for poor performance

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The high-low method is more accurate than the regression method of estimating a cost function

ACCOUNTING

True or False

The high-low method is more accurate than the regression method of estimating a cost function

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A positive slope of a regression line indicates that total costs are lower for higher values of the cost driver

ACCOUNTING

True or False

A positive slope of a regression line indicates that total costs are lower for higher values of the cost driver

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The y-intercept of a linear cost function is an accurate cost assessment of using zero machine-hours, even if zero machine-hours is outside of the rel

ACCOUNTING

True or False

The y-intercept of a linear cost function is an accurate cost assessment of using zero machine-hours, even if zero machine-hours is outside of the relevant range

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Regression analysis relies on only two observations to estimate a linear cost function

ACCOUNTING

True or False

Regression analysis relies on only two observations to estimate a linear cost function

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The most common forms of quantitative analysis are the conference method and the account analysis method

ACCOUNTING

True or False

The most common forms of quantitative analysis are the conference method and the account analysis method

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Evidence of relationships and extreme observations are highlighted when costs and their cost drivers are plotted graphically

ACCOUNTING

True or False

Evidence of relationships and extreme observations are highlighted when costs and their cost drivers are plotted graphically

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An example of time-series data is to compile maintenance costs of twelve different manufacturing plants incurred during 20x3

ACCOUNTING

True or False

An example of time-series data is to compile maintenance costs of twelve different manufacturing plants incurred during 20x3

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Wednesday, June 22, 2011

Individual cost items included in the dependent variable should have the same cost driver or more than one cost function should be estimated

ACCOUNTING

True or False

Individual cost items included in the dependent variable should have the same cost driver or more than one cost function should be estimated

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The industrial engineering method uses a formal mathematical method to identify cause-and-effect relationships among past data observations

ACCOUNTING

True or False

The industrial engineering method uses a formal mathematical method to identify cause-and-effect relationships among past data observations

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The account analysis method of cost estimation classifies account costs as fixed, mixed, or variable using qualitative judgments

ACCOUNTING

True or False

The account analysis method of cost estimation classifies account costs as fixed, mixed, or variable using qualitative judgments

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The industrial engineering method of cost estimation is based on opinions from various departments and is quick and of low cost to apply

ACCOUNTING

True or False

The industrial engineering method of cost estimation is based on opinions from various departments and is quick and of low cost to apply

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An example of a physical cause-and-effect relationship is when additional units of production increase total direct material costs

ACCOUNTING

True or False

An example of a physical cause-and-effect relationship is when additional units of production increase total direct material costs

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It can be inferred that when there is a high correlation between two variables, one is the cause of the other

ACCOUNTING

True or False

It can be inferred that when there is a high correlation between two variables, one is the cause of the other

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Knowing the proper relevant range is essential to properly classify costs

ACCOUNTING

True or False

Knowing the proper relevant range is essential to properly classify costs

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Any linear cost function can be graphed by knowing only the slope coefficient

ACCOUNTING

True or False

Any linear cost function can be graphed by knowing only the slope coefficient

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Outside of the relevant range, variable and fixed cost-behavior patterns may change

ACCOUNTING

True or False

Outside of the relevant range, variable and fixed cost-behavior patterns may change

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The longer the time horizon, the more likely that a cost will have a fixed cost behavior

ACCOUNTING

True or False

The longer the time horizon, the more likely that a cost will have a fixed cost behavior

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In a graphical display of a cost function, the steepness of the slope represents the total amount of fixed costs

ACCOUNTING

True or False

In a graphical display of a cost function, the steepness of the slope represents the total amount of fixed costs

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A linear cost function can only represent fixed cost behavior

ACCOUNTING

True or False

A linear cost function can only represent fixed cost behavior

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All cost functions are linear

ACCOUNTING

True or False

All cost functions are linear

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One assumption frequently made in cost behavior estimation is that changes in total costs can be explained by changes in the level of a single

ACCOUNTING

True or False

One assumption frequently made in cost behavior estimation is that changes in total costs can be explained by changes in the level of a single activity

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Tuesday, June 21, 2011

Money and Capital Markets 10th Edition Solutions Manual

SOLUTIONS MANUAL

Money and Capital Markets: Financial Institutions and Instruments in a Global Marketplace, 10e, by Rose and Marquis Solutions Manual

Money and Capital Markets: Financial Institutions and Instruments in a Global Marketplace, 10th Edition, by Rose and Marquis Solutions Manual

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Sunday, June 19, 2011

What is the breakeven point in units using absorption costing if the units produced are actually 2,250?

ACCOUNTING

Multiple Choice

Greene Manufacturing incurred the following expenses during 20x2:


Fixed manufacturing costs $45,000

Fixed nonmanufacturing costs $35,000

Unit selling price $100

Total unit cost $40

Variable manufacturing cost rate $20

Units produced 1,340 units


What is the breakeven point in units using absorption costing if the units produced are actually 2,250?

a. 1,330 units

b. 1,000 units

c. 887 units

d. 583 units

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What will be the breakeven point in units if absorption costing is used?

ACCOUNTING

Multiple Choice

Greene Manufacturing incurred the following expenses during 20x2:


Fixed manufacturing costs $45,000

Fixed nonmanufacturing costs $35,000

Unit selling price $100

Total unit cost $40

Variable manufacturing cost rate $20

Units produced 1,340 units


What will be the breakeven point in units if absorption costing is used?

a. 1,330 units

b. 1,000 units

c. 887 units

d. 563 units

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What will be the breakeven point if variable costing is used?

ACCOUNTING

Multiple Choice

Greene Manufacturing incurred the following expenses during 20x2:


Fixed manufacturing costs $45,000

Fixed nonmanufacturing costs $35,000

Unit selling price $100

Total unit cost $40

Variable manufacturing cost rate $20

Units produced 1,340 units


What will be the breakeven point if variable costing is used?

a. 1,334 units

b. 1,125 units

c. 1,000 units

d. 563 units

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What is absorption costing breakeven in units?

ACCOUNTING

Multiple Choice

The following information pertains to the Bean Company:



Selling price per unit $123

Standard fixed manufacturing costs per unit $60

Variable selling and administrative costs per unit $12

Standard variable manufacturing costs per unit $3

Fixed selling and administrative costs $48,000

Units produced 10,000 units

Units sold 9,600 units



What is absorption costing breakeven in units?

a. 917 units

b. 1,000 units

c. 5,838 units

d. 6,000 units

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What is variable costing breakeven in units?

ACCOUNTING

Multiple Choice

The following information pertains to the Bean Company:


Selling price per unit $123

Standard fixed manufacturing costs per unit $60

Variable selling and administrative costs per unit $12

Standard variable manufacturing costs per unit $3

Fixed selling and administrative costs $48,000

Units produced 10,000 units

Units sold 9,600 units


What is variable costing breakeven in units?

a. 833 units

b. 5,556 units

c. 5,838 units

d. 6,000 units

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What are breakeven sales in units using absorption costing if the production units are actually 25,000?

ACCOUNTING

Multiple Choice

Ms. Andrea Chadwick, the company president, has heard that there are multiple breakeven points for every product. She does not believe this and has asked you to provide the evidence of such a possibility. Some information about the company for 20x2 is as follows:



Total fixed manufacturing overhead $180,000

Total other fixed expenses $200,000

Total variable manufacturing expenses $120,000

Total other variable expenses $120,000

Units produced 30,000 units

Budgeted production 30,000 units

Units sold 25,000 units

Selling price $40



What are breakeven sales in units using absorption costing if the production units are actually 25,000?

a. 5,625 units

b. 6,667 units

c. 7,667 units

d. 8,846 units

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What are breakeven sales in units using absorption costing?

ACCOUNTING

Multiple Choice

Ms. Andrea Chadwick, the company president, has heard that there are multiple breakeven points for every product. She does not believe this and has asked you to provide the evidence of such a possibility. Some information about the company for 20x2 is as follows:



Total fixed manufacturing overhead $180,000

Total other fixed expenses $200,000

Total variable manufacturing expenses $120,000

Total other variable expenses $120,000

Units produced 30,000 units

Budgeted production 30,000 units

Units sold 25,000 units

Selling price $40



What are breakeven sales in units using absorption costing?

a. 5,625 units

b. 6,667 units

c. 7,692 units

d. 8,000 unitss

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What are breakeven sales in units using variable costing?

ACCOUNTING

Multiple Choice

Ms. Andrea Chadwick, the company president, has heard that there are multiple breakeven points for every product. She does not believe this and has asked you to provide the evidence of such a possibility. Some information about the company for 20x2 is as follows:



Total fixed manufacturing overhead $180,000

Total other fixed expenses $200,000

Total variable manufacturing expenses $120,000

Total other variable expenses $120,000

Units produced 30,000 units

Budgeted production 30,000 units

Units sold 25,000 units

Selling price $40



What are breakeven sales in units using variable costing?

a. 5,625 units

b. 5,769 units

c. 11,875 units

d. 12,180 units

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There is not an output-level variance for variable costing, because

ACCOUNTING

Multiple Choice

There is not an output-level variance for variable costing, because

a. the inventory level decreased during the period.

b. the inventory level increased during the period.

c. fixed manufacturing overhead is allocated to work in process.

d. fixed manufacturing overhead is not allocated to work in process.

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