lOMoARcPS D|14768309

EASTERN VISAYAS STATE UNIVERSITY

COST ACCOUNTING
SY 2022-2023

NAME:_______________________ YEAR & SECTION:_______ QUIZ NO: ________

INSTRUCTION: Write your answer in a separate sheet of paper. Do not write on the test
questionnaire. In answering Test I, write the letter of your answer in capital letter. In
Test II, show your solution and write the final answer with label, peso sign and double
rule. Final answer should be rounded to 2 decimals places. God Bless!

TEST I

1. These are among the methods of segregating fixed cost and variable costs except:
A. Simple regression analysis
B. Scattergraph
C. Breakeven method
D. High-low method

2. All of the following are assumptions underlying the validity of linear regression
output except
A. The errors are normally distributed and their mean is zero.
B. Certainty.
C. The variance of the errors is constant.
D. The independent variables are not correlated with each other.

3. In determining the cost behavior in business, the cost function is often

expressed as Y= a + bx. Which one of the following cost estimation methods
should not be used in estimating fixed and variable costs for the equation?
A. Graphic method.
B. High-and-low-point method.
C. Simple regression
D. Multiple regressions.

4. The segregation of fixed costs and variable costs is key to proper cost
analysis. Regression analysis is a technique used for this purpose.
Identify the appropriate statements below on regression analysis:
1. It assumes that a change in value of a dependent variable is related to the
change in the value of an independent variable.
2. A linear relationship between direct cost and production volume can cause a
problem when using accounting data for regression analysis.
3. It attempts to find an equation for the linear relationship among variable
4. It establishes a cause and effect relationship.
A. All four statements are appropriate.
B. Statements 1,3 and 4 only.
C. Statements 1 and 3 only
D. Statements 2 and 4 only

5. Simple regression analysis involves the use of

Dependent variables Independent variables
A. One None
B. One One
C. One Two
D. None Two

6. When the relationship between the independent and dependent variable is not
expected to remain constant, an appropriate method analysis is
A. Cluster analysis
B. Curvilinear regression
C. Simple linear regression
D. Simplex linear programming

7. A division uses a regression in which monthly advertising expenditures are

used to predict monthly product sales (both in millions of dollars). The
results show a regression coefficient for the independent variable equal to
0.8. This coefficient value indicates that
A. The average monthly advertising expenditure in the sample of P800,000
B. When monthly advertising is at its average level, product sales will be P800,000
C. On average, for every additional dollar in advertising, sales increase by P.80
D. Advertising is not good predictor of sales because the coefficient is so
small.
8. Quality control program employs many tools for problem definition and
analysis. A scatter diagram is one of these tools. The objective of a
scatter diagram is to
A. Display a population of items for analysis.
B. Show frequency distribution in graphic form
C. Divide a universe of data into homogenous groups
D. Show the vital trend and separate trivial items
9. In regression analysis, the coefficient of determination is a measure of
A. The amount of variation in the dependent variable explained by the independent
variables.
B. The amount of variation in the dependent variable unexplained by the
independent variables.
C. The slope of the regression line.
D. The predicted value of the independent variable.

10. Using the regression analysis, Thump Company graphed the following relationship
of its cheapest product line’s sales with its customers’ income levels:

Sales(P)

Income levels increasing

If there is a strong statistical relationship between the sales and the customers’
income levels, which of the following equation bet represents the correlation
coefficient for this relationship?
A. -9.00
B. -0.93
C. +0.93
D. +9.00

TEST II:
1. High-Low Method (Separating Mixed Costs): The management of Monica
Corporation would like to have a better understanding of the behavior of its
assembly costs. The company has provided the following data: (2 points each)
Labor Hours Assembly Cost
x y

January 2,500 P 36,800

February 2,900 42,000
March 1,900LP 27,000
April 3,100 46,000
May 23,800 OUTLIR 156,500
June 4,700 HP 62,000

The maximum capacity in terms of labor hours is 10,000 hrs. Management believes that
inspection cost is a mixed cost that depends on direct labor-hours.

Required: Using the high low method, answer the following:

a. What is the highest point? 4700 HP bc 23,800 cant be considered as HP bc
it is an outlier
b. Estimate the variable cost per direct labor-hour. P12.50 VC/DL HR
c. Estimate the fixed cost per month P3,250.00 FC/MONTH
d. Write the cost formula y =a + bx , y = 3,250 + 12.5x
e. Estimate the cost for 5,000 direct labor hours.P65,750 TOTAL COST FOR 5,000
DL HRS
f. Use the cost formula using the date in the month of February VC P36,250, FC
P3250

2. Least Squares Regression (Separating Mixed Costs): Phoebe Corporation would

like to have a better understanding of the behavior of its costs. The company
has provided the following data: (3 points each)
Cost Labor Hours
January 56,500 3,800
February 44,000 3,300
March 49,500 4,100
April 45,500 3,500
May 31,000 2,000
June 52,000 3,700
July 62,000 4,700
August 55,500 4,200

Required: Using the least squares regression:

a. How much is the ∑x2 = P111,810,000 / 111,810,000
b. How much is the ∑xy = P1501,000,000 / 1501,000,000
c. Estimate the variable cost per direct labor-hour. P11.26 VC/DL HR
d. Estimate the fixed cost per month P8,260.25 FC/MONTH , P8,265.07 FC/MONTH
e. Write the cost formula = Y = A+BX , Y = P8,260.25 + P11.26X OR Y = P8265.07
+P11.26X
f. Estimate the cost for 3,500 labor hours. P47,670.25 TOTAL COST FOR 3500
LABOR HOURS or P47,675.07 TOTAL COST FOR 3500 DL HRS.

“Luck is great, but most of life is hard work.”- Iain Duncan Smith