Dies Flashcards
Which of the following describes the way in which variable costs per unit behave?
They will remain the same throughout production levels.
An increase in total variable cost usually indicates
Cost driver activity level is increasing.
The high-low method basically fits a line through the highest and lowest ________ points.
Volume
Which of the following statements is NOT true regarding regression analysis?
Regression analysis considers all of the data points for determining the line that best fits the data so is usually less accurate than the high-low method.
Your boss wants you to analyze the relationship between the company’s monthly operating costs and the current cost driver she has chosen. You run a regression analysis and receive the following information:Intercept Coefficient = 653,434, X Variable 1 Coefficient = 5.76, R-square = 0.3784. Should you use this information to predict monthly operating costs?
No, because of the R-square
value.
On a regression analysis output generated with Excel, a regression equation’s fixed cost component is represented by the..
Intercept coefficient
________ should be subtracted from the sales price per unit to compute the unit contribution margin.
All variable costs.
The contribution margin ratio explains the percentage of each sales dollar that..
Contributes towards fixed costs and generating a profit.
Which of the following statements is true about the absorption costing method?
Fixed manufacturing costs are included in inventoriable product cost.
Absorption costing would produce a higher operating income than variable costing..
only when sales volume is less than production volume
