A

Assume that a managerial accountant regularly communicates with business associates to

avoid conflicts of interest and advises relevant parties of potential conflicts. In so doing, the
accountant will have applied the ethical standard of:
- Integrity
- Credibility

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A profit-sharing bonus that is paid to the associate director of a firm that conducts professional-
development courses for executives. The bonus is based on revenues from courses that are
being run, subject to a maximum amount each year. Which graph best represents the behavior
of this cost?
- A straight line that gradually slopes upward to the right and then, at a specific
point, flattens out to run parallel to the horizontal axis

As production takes place, all manufacturing costs are added to the:

- Work-in-Process Inventory account

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Armer Company is accumulating data to use in preparing its annual profit plan for the coming
year. The cost behavior pattern of the maintenance costs must be determined. The accounting
staff has suggested the use of linear regression to derive an equation for maintenance hours
and costs. Data regarding the maintenance hours and costs for the
last year and the results of the regression analysis follow:

The coefficient of determination for Armer’s regression equation for the maintenance
activities is
- Response: .99724

Based on the data derived from the regression analysis, 420 maintenance hours in a
month mean that maintenance costs should be budgeted to the nearest dollar at
- Response: $3,746

Using the high-low method to estimate cost behavior, 420 maintenance hours in a month
would mean the maintenance costs would be budgeted at:
- 3,720

If Armer Company uses the high-low method of analysis, the equation for the
relationship between hours of activity and maintenance cost follows:
- y = 570 + 9.0 x
- Y - 106 + 6.3 x

The percent of the total variance that can be explained by the regression equation is
- 99.724%
At 400 hours of activity, Armer management can be approximately two-
thirds confident that the maintenance costs will be in the range of
- 3,586.18 to 3,613.93
- 3,565.54 to 3,634.48

What is the variable cost per hour using the high low method to estimate
the cost equation?
- 7.50

What is the fixed cost per month using the high low method to estimate
the cost equation?
- 570

What would be the cost equation if regression analysis is used?

- Maintenance Cost = 684.65 + 7.2884 x Hours of Activity

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B
Baxter Company, which pays a 10% commission to its salespeople, reported sales revenues of
210, 000 for the period just ended. If Fixed And Variable Sales Expenses Totaled 56,000, what
would these expenses total at sales of $168,000?
- $44,800.
- 51,800
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E
Electricity costs that were incurred by a company's production processes should be debited to:
- Manufacturing Overhead

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F
Flood insurance premiums that are paid by Reliable Manufacturing, which operates a production
facility close to a river. Which graph best represents the behavior of this cost?
- A straight line that is parallel to the graph's horizontal axis

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H
Huxtable charges manufacturing overhead to products by using a predetermined application
rate, computed on the basis of machine hours. The following data pertain to the current year:
Budgeted manufacturing overhead: 480,000
Actual manufacturing overhead: 440,000
Budgeted machine hours: 20,000
Actual machine hours: 16,000
Overhead applied to production totaled:
- $384,000.
I
If the total cost of alternative A is 50,000 and the total cost of alternative B is 34,000, then
$16,000 is termed the:
- Differential Cost

M
Manufacturing overhead:
- is a pool of indirect production costs that must somehow be attached to each
unit manufactured.

Metro Corporation uses a predetermined overhead rate of $20 per machine hour. In deriving
this figure, the company's accountant used:

- a denominator of budgeted machine hours for the current accounting period.

P
Product costing in a manufacturing firm is the process of:
- assigning costs to the firm's inventory.

S
Strong Company applies overhead based on machine hours. At the beginning of 20x1, the company
estimated that manufacturing overhead would be 500,000, and machine hours would total 20, 000. By
20x1 year − end, actual overhead totaled 525,000, and actual machine hours were 25,000. On the basis
of this information, the 20x1 predetermined overhead rate was:
- $25 per machine hour.

Song, Inc., uses the high-low method to analyze cost behavior. The company observed that at
22,000 machine hours of activity, total maintenance costs averaged 33.40 per hour.When
activityjumped to 25, 000 machine hours, which was still within the relevant range the average
total cost per machine 1. On the basis of this information, the variable cost per machine
hour was:
- $8.40
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Song, Inc., uses the high-low method to analyze cost behavior. The company observed that at
22,000 machine hours of activity, total maintenance costs averaged 33.40 per hour.When
activityjumped to 25, 000 machine hours, which was still within the relevant range the average
total cost per machine 2. On the basis of this information, the fixed cost was:
- $550,000

Song, Inc., uses the high-low method to analyze cost behavior. The company observed that at
22,000 machine hours of activity, total maintenance costs averaged 33.40 per hour.When
activityjumped to 25, 000 machine hours, which was still within the relevant range the average
total cost per machine 3. On the basis of this information, what were total maintenance
costs when the company experienced 23,000 machine hours?
- $550,000.
- 743,200

Summers Corporation recently used 75,000 of direct materials, 9,000 of indirect materials in
production activities. The journal entries reflecting these transactions would include:
- a debit to Manufacturing Overhead for $9,000.

T
The cost of glass used by a manufacturer of automobile windshields. Which graph best
represents the behavior of this cost?
- A straight line that gradually slopes upward to the right

The following data relate to the Lisle Company for May and August of the current year:
Maintenance hours: 25,000; 29,000
Maintenance cost: 1,175,000;1,247,000
May and August were the lowest and highest activity levels, and Lisle uses the high-low
method to analyze cost behavior. Which of the following statements is true?
- The fixed maintenance cost is $725,000 per month.
May and August were the lowest and highest activity levels, and Lisle uses the high-low
method to analyze cost behavior. If maintenance hours are estimated to be 26,000 hours
in October, which of the following statements is true?

- Total maintenance costs will be $1,193,000.

May and August were the lowest and highest activity levels, and Lisle uses the high-low
method to analyze cost behavior. Which of the following statements is true?
- The variable maintenance cost is $18 per hour.
- The fixed maintenance cost is 60,000 per month. - option 2
The paper cost that is used in the production of a textbook. Note: Assume that for this part only,
the graph's vertical axis represents the cost per unit rather than total cost. Which graph best
represents the behavior of this cost?
- A straight line that is parallel to the graph's horizontal axis

The left side of the Manufacturing Overhead account is used to accumulate:

- actual manufacturing overhead costs incurred throughout the accounting period.

The following statistical measures can aid management accountants in assessing the
usefulness of the regression except
 - t-value

The salary cost of lab technicians employed at a clinic. One technician is needed for every
1,500 patients serviced. Which graph best represents the behavior of this cost?

- A series of straight lines that appear to resemble a set of steps

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The cost of glass used by a manufacturer of automobile windshields. Which graph best
represents the behavior of this cost?

- A straight line that gradually slopes upward to the right

Tariffs that are paid on products shipped overseas. For one particular country, if fewer than
15,000 units are shipped, the client must pay 4 per unit. The tariff is raised by 1 according to the
following schedule:

15,000 to 29,999 units - 5 per unit 30,000 to 44,999 units - 6 per unit

15,000 to 59,999 units - $7 per unit

Which graph best represents the behavior slopes upward to the right?

- A curvilinear line that gradually slopes upward to the right

V
Vincente Corporation has a machining capacity of 200,000 hours per year. Utilization of
capacity is normally 75%; it has been as low as 40% and as high as 90%. An analysis of the
accounting records revealed the following selected costs:
Vincente uses the high-low method to analyze cost behavior.
What is the total amount that Viscount would expect at a 75% utilization rate for Cost A,
B, and C?
- $3,195,000

What is the total amount that Viscount would expect at a 75% utilization rate for Cost B?
- $1,620,000.

What is the total amount that Viscount would expect at a 75% utilization rate for Cost C?
- $1,135,000

The cost per hour of Cost A is

- $2.44

The equation that Vicente can use to predict total cost for any level of any hours within
its range of operation is
- Y = 440,000 + 10.80X

The total cost of Cost B at 40% utilization rate is

- $ 864,000.

W
Which of the following is an element of integrity?
- Mitigate actual conflicts of interest. Regularly communicate with business
associates to avoid apparent conflicts of interest. Advise all parties of any
potential conflicts of interest.
Which of the following statements is true.
- All of the above

Which of the following statements is true?

- Service firms have little need for determining the cost of their services.

Which of the following is not an element of confidentiality?

- Communicate information fairly and objectively.

Which of the following is not an element of confidentiality?

- Provide decision support information and recommendations that are accurate, clear,
concise, and timely. Recognize and help manage risk
Which of the following is the correct method to calculate a predetermined overhead rate?
- Budgeted overhead cost budgeted amount of cost drive

Which of the following statements about manufacturing cost flows is false?

- When a company sells goods that cost 54, 000 for 60,000, the firm will enter $6,000
in an account entitled Profit on Sale

Correct Answer in quizlet: D. When a company sells goods that cost $54,000 for $60,000, the
firm will enter $6,000 in an account entitled Profit on Sale.

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Which of the following is not an element of competency?

- To refrain from engaging in an activity that would discredit the accounting
profession.
Which of the following would not be characterized as a cost object?

- All of these are examples of cost objects.

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Y
Yang Manufacturing, which uses the high-low method, makes a product called Yin. The
company incurs three different cost types (A, B, and C) and has a relevant range of operation
between 2,500 units and 10,000 units per month. Per-unit costs at two different activity levels for
each cost type are presented below.

The cost formula that expresses the behavior of Yang's total cost is:
- Y = 60,000 + 5X.

The cost types shown above are identified by behavior as:

- Variable, Fixed, Semi-variable
If Yang produces 10,000 units, the total cost would be:
- Response: $110,000.

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