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| 1 | |
Greenfield Company has derived the following regression equation to forecast manufacturing overhead: Y = $455 000 + 9.25X. Which of the following statements is true if the cost driver is labour hours? |
| | A) | Total manufacturing overhead is represented by the variable X. |
| | B) | Greenfield Company is expecting to incur $455 000 of fixed manufacturing overhead. |
| | C) | Y represents the number of labour hours. |
| | D) | X represents the number of labour hours. |
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| 2 | |
Greenfield Company has derived the following regression equation to forecast manufacturing overhead: Y = $455 000 + 9.25X. Which of the following statements is true if the cost driver is labour hours? |
| | A) | Total manufacturing overhead is represented by the variable X. |
| | B) | Greenfield Company is expecting to incur $455 000 of fixed manufacturing overhead. |
| | C) | Y represents the number of labour hours. |
| | D) | X represents the number of machine hours. |
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| 3 | |
Sarah Benjamin, a management accountant employed by ABC Fruit Canning Company, has been assigned the task of implementing a contemporary method of analysing cost behaviour—activity-based costing. She is currently investigating under which activity-based costing classification she should assign the costs incurred through researching, designing, developing and supporting products and product lines. Under which activity-based costing classification should she assign these costs? |
| | A) | Product level (or product-sustaining) costs. |
| | B) | Batch level costs. |
| | C) | Unit level costs. |
| | D) | Facility level (or facility-sustaining) level costs. |
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| 4 | |
The cost of the timber used in the production of bookcases, with changes in total in direct proportion to a change in the number of bookcases produced is an example of a: |
| | A) | variable cost |
| | B) | fixed cost |
| | C) | semivariable cost |
| | D) | step-variable cost |
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| 5 | |
In the total cost function, Y = a + bX, b represents: |
| | A) | total cost |
| | B) | fixed cost component (the intercept on the vertical axis) |
| | C) | the level of activity |
| | D) | variable cost per unit of activity (the slope of the line) |
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| 6 | |
Topaz company has the following forecast costs at its anticipated production level (expressed in hours): variable overhead, $270 000; fixed overhead, $450 000. If Topaz now revises its anticipated production upwards slightly, it would expect: |
| | A) | total fixed overhead to remain at $450 000, with a lower hourly rate for variable overhead |
| | B) | total fixed overhead to remain at $450 000, with the same hourly rate for variable overhead |
| | C) | total fixed overhead to remain at $450 000, with a higher hourly rate for variable overhead |
| | D) | total fixed overhead to reduce slightly, with a higher hourly rate for variable overhead |
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| 7 | |
The Glastonbury Hospital provides a number of medical services to patients. A review of data for the year just ended revealed variable costs of $25 per patient day, annual fixed costs of $300 000 and semivariable costs that display the following behaviour at the busy and slack periods of activity: January (2500 patient days) = $255 000
June (3000 patient days) = $270 000 The variable component of the semivariable cost is: |
| | A) | $25 per patient day |
| | B) | $30 per patient day |
| | C) | $40 per patient day |
| | D) | $50 per patient day |
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| 8 | |
The Glastonbury Hospital provides a number of medical services to patients. A review of data for the year just ended revealed variable costs of $25 per patient day, annual fixed costs of $300 000 and semivariable costs that display the following behaviour at the busy and slack periods of activity: January (2500 patient days) = $255 000
June (3000 patient days) = $270 000 The fixed component of the semivariable cost is: |
| | A) | $180 000 |
| | B) | $192 500 |
| | C) | $130 000 |
| | D) | $117 500 |
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| 9 | |
The Glastonbury Hospital provides a number of medical services to patients. A review of data for the year just ended revealed variable costs of $25 per patient day, annual fixed costs of $300 000 and semivariable costs that display the following behaviour at the busy and slack periods of activity: January (2500 patient days) = $255 000
June (3000 patient days) = $270 000 What is the total cost of the upcoming month, where 2600 patient days are expected, if the current cost behaviour patterns are forecast to continue? |
| | A) | $258 000. |
| | B) | $623 000. |
| | C) | $323 000. |
| | D) | $348 000. |
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| 10 | |
Sarah Benjamin, a management accountant employed by ABC Fruit Canning Company, has been assigned the task of implementing a contemporary method of analysing cost behaviour—activity-based costing. She is currently investigating which activity-based costing classification she should assign to the costs incurred in the inspection of fruit required for a special production run of premium-quality canned fruit destined for Japan. What activity-based costing classification should she assign to these costs? |
| | A) | Product level (or product-sustaining). |
| | B) | Batch level. |
| | C) | Unit level. |
| | D) | Facility level (or facility-sustaining). |
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