3/24/2021 0 Comments Criteria For Choosing Cost Drivers
C) Simple regression uses only one dependent and one independent variable, whereas multiple regression uses one dependent and more than one independent variable.Three criteria to use in identifying cost drivers from the potentially large set of independent variables that can be included in a regression model are A.Which of the following is not a common problem encountered in collecting data for cost estimation A.
A) process of calculating present value of projected cash flows B) process of allocating costs to cost centers or cost objects C) mathematical description of how a cost changes with changes in the level of an activity relating to that cost D) is a very thorough and detailed way to identifying a cost object when there is a physical relationship between inputs and outputs C) mathematical description of how a cost changes with changes in the level of an activity relating to that cost Bennet Company employs 20 individuals. Eighteen employees are paid 18 per hour and the rest are salaried employees paid 3,000 a month. Which of the following is the total cost function of personnel A) y a bX B) y b C) y bX D) y a A) y a bX Crimson Services, Inc., employs 8 individuals. They are all paid 16.50 per hour. How would total costs of personnel be classified A) variable cost B) mixed cost C) irrelevant cost D) fixed cost A) variable cost Which of the following statements is true of a linear cost function A) It presents variable cost as a slope coefficient. Which of the following is an equation of a fixed cost function A) y (a b)X B) y a bX C) y bX D) y a D) y a Which of the following is not true about the cause-and-effect criterion when estimating a cost function A) Correlation of variables proves cause-and-effect B) Managers must be careful not to equate high correlation between two variables to mean that either variable causes the other C) Knowledge of operations can help managers discover cause-and-effect relationships D) Contractual arrangements may show a direct cause and effect between two variables A) Correlation of variables proves cause-and-effect 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 B) based on analysis and opinions gathered from various departments 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 renders it seldom used D) in a manner that cannot be usefully combined with any other cost estimation methods A) by classifying cost accounts as variable, fixed, or mixed based on qualitative analysis Quantitative analysis methods estimate cost functions. Criteria For Choosing Cost Trial Engineering MethodA) using the time-and-motion studies B) based on analysis and opinions gathered from various departments C) using a formal mathematical method to fit cost functions to past data observations D) using the pooling of knowledge from each value chain function C) using a formal mathematical method to fit cost functions to past data observations Which cost estimation method would involve analyzing direct labor subsidiary accounts and classifying costs as a variable, fixed, or mixed to derive cost estimation formulas A) the account analysis method B) the conference method C) the marginal costing method D) the incremental costing method A) the account analysis method Which cost estimation method uses a formal statistical method such as regression analysis to develop cost functions based on past data A) the cash accounting method B) the conference method C) the accrual accounting method D) the quantitative analysis method D) the quantitative analysis method Which cost estimation method uses time-and-motion studies to reveal that to make a high quality mens suit jacket, it takes of 3 hours of direct labor effort per jacket and 5 minutes of a salaried manager to perform quality control A) the accrual accounting method B) the high-low method C) the industrial engineering method D) the cash accounting method C) the industrial engineering method The cost to be predicted and managed is referred to as the. A) independent variable B) dependent variable C) cost driver D) regression B) dependent variable In the estimation of a cost function using quantitative analysis, the independent variable. A) is the cost to be predicted B) is the product of fixed costs and slope coefficient C) is the factor used to predict the dependent variable D) is the product of total costs and slope coefficient C) is the factor used to predict the dependent variable A cost driver should be measurable and have an economically plausible relationship with the dependent variable which means: A) that the cost driver can be identified in an economically feasible way B) that the relationship is based on correlation C) that the relationship is based on a cause -and-effect criterion and makes economic sense to management D) that the relationship must be based on a physical relationship C) that the relationship is based on a cause -and-effect criterion and makes economic sense to management 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 B) C D B A E Which of the following is an example of time-series data: A) loan processing times in each of 26 similar branch offices over the last 12 months B) Direct labor hours in the Boston, Massachusetts and the New York City facility for each of the last 12 months C) indirect labor costs and machine-hours in a manufacturers assembly department each month for the last 12 months D) Store sales for each U.S. Wal-Mart for each the last 10 years. C) indirect labor costs and machine-hours in a manufacturers assembly department each month for the last 12 months 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 C) personnel costs of a month at 10 different organizations A plot of cost driver data and cost data may show all but the following: A) a strong relationship B) cause-and-effect relationship C) a positive relationship D) linear relationship B) cause-and-effect relationship 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 B) an unusual event such as a plant shutdown occurred during that month 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 C) observing different entities during the same time period Time-series data analysis includes. A) using a variety of time periods to measure the dependent variable of the same entity (organization, plant, or activity) B) using the highest and lowest observation for the same entity (organization, plant, or activity) C) observing different entities during the same time period for the same entity (organization, plant, or activity) D) comparing information in different cost pools for the same entity (organization, plant, or activity) A) using a variety of time periods to measure the dependent variable of the same entity (organization, plant, or activity) 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 A) cost driver 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 D) difference between the costs associated with highest and lowest observations of the cost driver The high-low method. A) measures the difference between actual cost and estimated cost for each observation of the cost driver B) calculates the standard deviation of residuals C) calculates the slope coefficient using only two observed values within the relevant range and their respective costs D) measures how well the predicted values, y, based on the cost driver, X, match actual cost observations, Y C) calculates the slope coefficient using only two observed values within the relevant range and their respective costs 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 C) A D C B Regression analysis. A) calculates the slope coefficient using only two observed values within the relevant range and their respective costs B) measures the average amount of change in the dependent variable associated with a unit change in one or more independent variables C) estimates the cost functions using the time-and-motion studies D) measures the variability or dispersion in a set of data points B) measures the average amount of change in the dependent variable associated with a unit change in one or more independent variables Which of the following statements shows a difference between simple regression and multiple regression A) Simple regression uses more than one dependent and independent variables, whereas multiple regression uses only one dependent and independent variable. B) Simple regression uses only the independent variables, whereas multiple regression uses only dependent variables.
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