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Student: ___________________________________________________________________________
1. ____ are costs that do not change in total when production volume increases or decreases within the relevant
range.
A. Variable costs
B. Relevant costs
C. Fixed costs
D. Period costs
7. ____ are costs that change in total when production volume increases or decreases within the relevant range.
A. Variable costs
B. Facility-level costs
C. Fixed costs
D. Period costs
13. When predicting cost behavior, the volume of production for which the fixed and variable cost relationships
are assumed to hold true is called the:
A. true range.
B. regression area.
C. dependent variable area.
D. relevant range.
14. You are given the following cost and volume information:
15. You are given the following cost and volume information:
16. You are given the following cost and volume information:
where "x" equals total direct labor hours for the month. If total direct labor hours for June are expected to be
600, what are total costs expected to be?
A. $ 9,500
B. $14,500
C. $12,000
D. $ 2,520
22. Logan Inc. plans to double its rental space next year which will increase its fixed costs by 30% while
variable costs will remain the same. Current year costs are as follows:
If next year production is expected to be 13,500 units, estimated total costs will be:
A. $289,500.
B. $270,000.
C. $285,000.
D. $250,500.
23. Jansen Inc. currently produces and sells 9,000 units per year with the following cost data:
Next year, Jansen plans to increase its advertising budget, which will increase fixed costs by 7%. With increased advertising, the company expects
the number of units produced and sold to increase by 12%. Determine the budgeted total cost for next year.
A. $70,500
B. $78,060
C. $78,585
D. $71,025
24. Bob's Burgers
Bob's Burgers currently produces and sells 12,000 burgers per month with the following costs:
Bob has recently switched food suppliers and anticipates that variable costs will decrease by $0.35 per unit. In addition, Bob has renegotiated his
store lease and fixed costs will be dropping by $8,000 per month.
Refer to the information provided for Bob's Burgers. What will be Bob's new cost equation?
A. Total costs = $60,000 + $2.75x
B. Total costs = $60,000 + $2.05x
C. Total costs = $8,000 + $0.35x
D. Total costs = $52,000 + $2.05x
Bob has recently switched food suppliers and anticipates that variable costs will decrease by $0.35 per unit. In addition, Bob has renegotiated his
store lease and fixed costs will be dropping by $8,000 per month.
Refer to the information provided for Bob's Burgers. Bob anticipates selling 12,300 burgers during the month of July. What will be estimated total
costs during July?
A. $77,215
B. $88,800
C. $76,600
D. $85,825
26. Quality Products Inc. incurred total costs of $50,000 to produce 1,400 units. Variable costs are $15 per unit.
What are estimated fixed costs?
A. $21,000
B. $71,000
C. $48,600
D. $29,000
27. Bixby Inc. expects total costs to be $75,000 when 500 units are sold and the variable cost is $18 per unit.
Bixby expects to sell 750 units in July. What will be expected total costs in July?
A. $75,000
B. $79,500
C. $66,000
D. $88,500
28. Chadwick Ski Lodge
Chadwick Ski Lodge decides how many housekeepers it needs to hire based on expected hotel occupancy. The
following shows the budgeted housekeeping costs per month at various occupancies:
Refer to the information provided for Chadwick Ski Lodge. What type of cost is housekeeping?
A. Semi variable
B. Variable
C. Step
D. Mixed
Refer to the information provided for Chadwick Ski Lodge. The number of occupied rooms during the month of January is expected to be between
41 and 55 at all times. For the month of January, what type of cost does housekeeping effectively become?
A. Fixed
B. Variable
C. Step
D. Mixed
30. A cost that has both a fixed and variable component is called a(n):
A. step cost.
B. mixed cost.
C. irrelevant cost.
D. relevant cost.
31. Regression analysis is a technique used to:
A. estimate the step and mixed components of total cost.
B. estimate the fixed and variable components of a mixed cost.
C. estimate the fixed and variable components of a step cost.
D. estimate the fixed and mixed components of step cost.
35. When using regression analysis to predict mixed cost behavior, which of the following would be the
dependent variable?
A. The highest level of activity.
B. The lowest level of activity.
C. The mixed cost at a given level of production.
D. The variable cost per unit.
36. When using regression analysis to predict mixed cost behavior, which of the following would be the
independent variable?
A. The highest level of activity.
B. The lowest level of activity.
C. The mixed cost at a given level of production.
D. The volume of production that drives a particular amount of mixed cost.
37. Regression Analysis 1
You run a regression analysis and receive the following results:
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.88000000
R Square 0.78219168
Adjusted R Square 0.70958891
Standard Error 1165.19000
Observations 5
df SS MS F Significance F
Regression 1 14626984.4 1E+07 10.7736 0.0463451
Residual 3 4073015.604 1E+06
Total 4 18700000
Refer to the Regression Analysis 1 above. What would be the equation to predict mixed cost behavior?
A. Y = $2.38 + $16,146.37x
B. Y = $1,165.19 + $.88x
C. Y = $16,146.37 + $2.38x
D. Y = $8,167.49 + $.73x
38. Regression Analysis 1
You run a regression analysis and receive the following results:
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.88000000
R Square 0.78219168
Adjusted R Square 0.70958891
Standard Error 1165.19000
Observations 5
df SS MS F Significance F
Regression 1 14626984.4 1E+07 10.7736 0.0463451
Residual 3 4073015.604 1E+06
Total 4 18700000
Refer to the Regression Analysis 1 above. To the nearest dollar, what would be the estimated total costs if 15,000 units were produced?
A. $51,846
B. $16,148
C. $19,117
D. $35,700
39. Regression Analysis 2
You run a regression analysis and receive the following results:
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.969762217
R Square 0.940438758
Adjusted R Square 0.92058501
Standard Error 360.0073099
Observations 5
ANOVA
df SS MS F Significance F
Regression 1 6139184.211 6139184.211 47.36832487 0.006283174
Residual 3 388815.7895 129605.2632
Total 4 6528000
Refer to the Regression Analysis 2 above. What would be the equation to predict total mixed costs?
A. Y = $1.27 + $3,056.58x
B. Y = $454.25 + $.18x
C. Y = $360.007 + $1.27x
D. Y = $3,056.58 + $1.27x
40. Regression Analysis 2
You run a regression analysis and receive the following results:
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.969762217
R Square 0.940438758
Adjusted R Square 0.92058501
Standard Error 360.0073099
Observations 5
ANOVA
df SS MS F Significance F
Regression 1 6139184.211 6139184.211 47.36832487 0.006283174
Residual 3 388815.7895 129605.2632
Total 4 6528000
Refer to the Regression Analysis 2 above. To the nearest dollar, what would be the estimated total costs if 500 units were produced?
A. $ 544
B. $4,236
C. $3,692
D. $3,147
41. George's Ice Cream Shop believes most of its utilities costs are mixed. George has collected the following
data on gallons of ice cream used and related utilities costs for the past six months:
Number of
gallons used Utilities cost
May 20 $ 700
June 30 850
July 40 1,100
August 30 975
September 25 900
October 22 720
George has run a regression analysis on the above information and has come up with the following data:
Coefficients
Intercept 329.5047923
X Variable 1 19.5686901
Using regression analysis, which of the following formulas would be the best predictor of total estimated mixed costs?
A. Y = $300 + $20x
B. Y = $329.50 + $19.57x
C. Y = $900 + $30x
D. Y = $19.56 + $329.50x
42. Hill Top Products has run a regression analysis for utilities costs and the total production for the past six
months. The regression analysis shows an R square (R2) of .86. Which of the following statements best
describes the meaning of R2?
A. 86 percent of the company's total costs are utilities costs.
B. 14 percent of the variation in utilities costs is explained by the increase or decrease in production.
C. 86 percent of the variation in utilities costs is explained by the increase or decrease in production.
D. 86 percent of the company's total costs are fixed costs and the remaining 14 percent are variable costs.
Refer to the information provided for Cool Creams. Using the high/low method, what is the variable cost per unit?
A. $4.50
B. $5.50
C. $4.75
D. $4.32
Refer to the information provided for Cool Creams. Using the high/low method, what is the overhead cost equation?
A. Y = $6,000 + $4.75x
B. Y = $1,500 + $4.50x
C. Y = $7,630 + $4.32x
D. Y = $1,500 + $4.32x
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Suppressing Mormonism.
Jas. G. Blaine.
The above well presents the Blaine view of the proposition to have
a Congress of the Republics of America at Washington, and under
the patronage of this government, with a view to settle all difficulties
by arbitration, to promote trade, and it is presumed to form alliances
ready to suit a new and advanced application of the Monroe doctrine.
The following is the letter proposing a conference of North and
South American Republics sent to the U. S. Ministers in Central and
South America:
Sir: The attitude of the United States with respect to the question of general
peace on the American Continent is well known through its persistent efforts for
years past to avert the evils of warfare, or, these efforts failing, to bring positive
conflicts to an end through pacific counsels or the advocacy of impartial
arbitration. This attitude has been consistently maintained, and always with such
fairness as to leave no room for imputing to our Government any motive except the
humane and disinterested one of saving the kindred States of the American
Continent from the burdens of war. The position of the United States, as the
leading power of the new world, might well give to its Government a claim to
authoritative utterance for the purpose of quieting discord among its neighbors,
with all of whom the most friendly relations exist. Nevertheless the good offices of
this Government are not, and have not at any time, been tendered with a show of
dictation or compulsion, but only as exhibiting the solicitous good will of a
common friend.
For some years past a growing disposition has been manifested by certain States
of Central and South America to refer disputes affecting grave questions of
international relationship and boundaries to arbitration rather than to the sword.
It has been on several occasions a source of profound satisfaction to the
Government of the United States to see that this country is in a large measure
looked to by all the American powers as their friend and mediator. The just and
impartial counsel of the President in such cases, has never been withheld, and his
efforts have been rewarded by the prevention of sanguinary strife or angry
contentions between peoples whom we regard as brethren. The existence of this
growing tendency convinces the President that the time is ripe for a proposal that
shall enlist the good will and active co-operation of all the States of the Western
Hemisphere both North and South, in the interest of humanity and for the
common weal of nations.
He conceives that none of the Governments of America can be less alive than our
own to the dangers and horrors of a state of war, and especially of war between
kinsmen. He is sure that none of the chiefs of Government on the Continent can be
less sensitive than he is to the sacred duty of making every endeavor to do away
with the chances of fratricidal strife, and he looks with hopeful confidence to such
active assistance from them as will serve to show the broadness of our common
humanity, the strength of the ties which bind us all together as a great and
harmonious system of American Commonwealths.
Impressed by these views, the President extends to all the independent countries
of North and South America an earnest invitation to participate in a general
Congress, to be held in the city of Washington, on the 22d of November, 1882, for
the purpose of considering and discussing the methods of preventing war between
the nations of America. He desires that the attention of the Congress shall be
strictly confined to this one great object; and its sole aim shall be to seek a way of
permanently averting the horrors of a cruel and bloody contest between countries
oftenest of one blood and speech, or the even worse calamity of internal
commotion and civil strife; that it shall regard the burdensome and far-reaching
consequences of such a struggle, the legacies of exhausted finances, of oppressive
debt, of onerous taxation, of ruined cities, of paralyzed industries, of devastated
fields, of ruthless conscriptions, of the slaughter of men, of the grief of the widow
and orphan, of embittered resentments that long survive those who provoked them
and heavily afflict the innocent generations that come after.
You will present these views to the Minister of Foreign Affairs of Costa Rica,
enlarging, if need be, in such terms as will readily occur to you upon the great
mission which it is within the power of the proposed Congress to accomplish in the
interest of humanity, and the firm purpose of the United States of America to
maintain a position of the most absolute and impartial friendship toward all. You
will, therefore, in the name of the President of the United States, tender to his
Excellency, the President of ——, a formal invitation to send two commissioners to
the Congress, provided with such powers and instructions on behalf of their
Government as will enable them to consider the questions brought before that
body within the limit of submission contemplated by this invitation.
The United States, as well as the other powers, will in like manner be
represented by two commissioners, so that equality and impartiality will be amply
secured in the proceedings of the Congress.
In delivering this invitation through the Minister of Foreign Affairs, you will
read this despatch to him and leave with him a copy, intimating that an answer is
desired by this Government as promptly as the just consideration of so important a
proposition will permit.
I am, sir, your obedient servant,
James G. Blaine.
Minister Logan’s Reply.