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Exam 10: Analysis of Cost Behaviour

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Question 21

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Which cost estimation method typically uses qualitative analysis rather than quantitative analysis?

A) the account analysis method
B) the conference method
C) the industrial-engineering method
D) the quantitative analysis method
E) the departmental analysis method

F) A) and B)
G) None of the above

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Question 22

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Appraisal costs include all of the following EXCEPT

A) inspection.
B) spoilage.
C) product testing.
D) process inspection.
E) online product manufacturing.

F) A) and E)
G) A) and D)

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Question 23

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Preventive equipment maintenance is an example of

The number of defects in units shipped to customers as a percentage of total units shipped, is a non-financial measure.

Nidek manufactures sport swear.Classify each of the following quality costs as prevention, appraisal, internal failure or external failure. A)Internal failure B)Prevention C)Appraisal D)External failure -Testing and inspecting of machinery

Manufacturing lead time is a combination of order receipt time and order manufacturing time.

The Door Company manufactures doors.Classify each of the following quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs. A)Appraisal B)Internal failure C)Prevention D)External failure -Lost sales arising from a reputation for poor quality

The Kochen Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Required: Using the high-low method determine the forecasted cost for July if the number of hours used is expected to be 3,000.

Supplier evaluations are an example of

Harry's Picture manufactures various picture frames.Each new employee takes 5 hours to make the first picture frame and 4 hours to make the second.The manufacturing overhead charge per hour is $20.Required: a.What is the learning-curve percentage, assuming the cumulative average method? b.What is the time needed to build 8 picture frames by a new employee using the cumulative average-time method? Assume the rate of learning factor is -0.1520. c.What is the time needed to produce the 16th frame by a new employee using the incremental unit-time method? Assume the rate of learning factor is -0.3219.

Patrick Ross, the president of Ross's Wild Game Company, has asked for information about the cost behaviour of manufacturing overhead costs.Specifically, he wants to know how much overhead cost is fixed and how much is variable.The following data are the only records available: Required: Using the high-low method, determine the overhead cost equation.Use machine-hours as your cost driver.

The use of a single independent variable (X) to estimate the dependent variable (y) is known as

Use the information below to answer the following question(s) .The Skip Corporation has assembled the following data pertaining to certain costs which cannot be easily identified as either fixed or variable.Skip Corporation has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation. -The cost function would be stated as

In multiple regression, when two or more independent variables are correlated with one another, the situation is known as

Miller's Good Value Appliance Store is a small company that has hired you to perform some management advisory services.The following information pertains to 2019 operations. Required: Determine the operating costs using the account analysis method if Miller's expects to sell 6,500 units next year.

Norton's Convenience store has a variable demand.The daily demand ranges from 270 to 330 customers a day who average purchasing 5 items each.The average daily demand is 300 customers.The convenience store currently operates 12 hours a day.Each order takes approximately 2 minutes.Required: a.What is the average customer waiting time, in minutes? b.What is the cycle time for an order? c.What is the waiting time if the average daily demand remains at 300 customers?

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

Nidek manufactures sport swear.Classify each of the following quality costs as prevention, appraisal, internal failure or external failure. A)Internal failure B)Prevention C)Appraisal D)External failure -Field testing

In regression analysis, the term independence of residuals means

A company has identified the following data: What is the order manufacturing time?