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3) Quantitative analysis methods estimate cost functions: A) which depend on the experience and judgment of the analyst for accuracy B) based on analysis and opinions gathered from various departments C) using significant amounts of historical data D) using the pooling of knowledge from each value chain function 4) Gathering.
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62) Relevant costs are expected future costs that differ among alternatives. 63) Relevant revenues are expected future revenues that do NOT differ among alternatives. 64) The amount paid to purchase equipment last year is an example of a sunk cost. 65) For decision making, differential costs assist in choosing between alternatives. 66).
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34) The last step in estimating a cost function using quantitative analysis is to identify the independent variable. 35) In estimating a cost function using quantitative analysis, the dependent variable is the factor used to predict the independent variable. 36) Cross-sectional data pertain to the same entity (organization, plant, activity, and.
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101) Are relevant revenues and relevant costs the only information needed by managers to select among alternatives? Explain using examples. 102) Under what conditions might a manufacturing firm sell a product for less than its long-term price? Why? 1) If there was limited capacity, all of the following amounts would.
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1) Which of the following statements related to assumptions about estimating linear cost functions is FALSE? A) Variations in a single cost driver explain variations in total costs. B) A cost object is anything for which a separate measurement of costs is desired. C) A linear function approximates cost behavior.
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31) Other than price, what other items should Heck's Kitchens consider before accepting this one-time-only special order? A) reaction of shareholders B) reaction of existing customers to the lower price offered to Mr. Louis Cifer C) demand for cherry cabinets D) price is the only consideration 32) If Louis Cifer wanted.
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92) Parker and Spitzer Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The following per unit data apply for sales to regular customers: Direct materials$66 Direct labor30 Variable manufacturing support48 Fixed manufacturing support104 Total manufacturing costs248 Markup (50%)124 Targeted selling price$372 Parker.
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Answer the following questions using the information below: Jerry's TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 2011 operations. Sales (1,000 televisions)$ 900,000 Cost of goods sold400,000 Store manager's salary per year70,000 Operating costs per year157,000 Advertising and promotion per.
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72) Quantitative factors are outcomes that are measured in numerical terms. 73) Qualitative factors are outcomes that are measured in numerical terms, such as the costs of direct labor. 74) If a manufacturer chooses to continue purchasing direct materials from a supplier because of the ongoing relationship that has developed over.
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30) Ernsting Bottling Works manufactures glass bottles. January and February operations were identical in every way except for the planned production. January had a production denominator of 35,000 units. February had a production denominator of 36,000 units. Fixed manufacturing costs totaled $126,000. Sales for both months totaled 45,000 units with variable manufacturing costs.
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1) Over the short run, a nonlinear cost function would most likely result from all of the following EXCEPT: A) quantity discounts for each additional 10,000 parts purchased B) purchasing another $250,000 printing machine to double production C) hiring a third production supervisor D) incurring greater total utility costs for.
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Answer the following questions using the information below: A manufacturing firm is able to produce 2,000 pairs of sneakers per hour, at maximum efficiency. There are three eight-hour shifts each day. Due to unavoidable operating interruptions, production averages 1,600 units per hour. The plant actually operates only 27 days per.
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11) When large differences exist between practical capacity and master-budget capacity utilization, companies may: A) classify the difference as planned unused capacity B) use master-budget capacity utilization for setting selling prices C) use practical capacity for meaningful feedback to the marketing manager D) All of these answers are correct. 12).
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1) The coefficient of determination is important in explaining variances in estimating equations. For a certain estimating equation, the unexplained variation was given as 26,505. The total variation was given as 46,500. What is the coefficient of determination for the equation? A) 0.34 B) 0.43 C) 0.57 D) 0.66 2).
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21) Outside of the relevant range, variable and fixed cost-behavior patterns remain constant. 22) Any linear cost function can be graphed by knowing only the slope coefficient. 23) Knowing the proper relevant range is essential to properly classify costs. 24) Write a linear cost function equation for each of the.
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22) Harry's Picture manufactures various picture frames. Each new employee takes 5 hours to make the first picture frame and 4 hours to make the second. The manufacturing overhead charge per hour is $20. Required: a.What is the learning-curve percentage, assuming the cumulative average method? b.What is the time needed to build.
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41) Insourcing is: A) purchasing goods and services internally B) purchasing goods and services from outside vendors C) more expensive than outsourcing D) less expensive than outsourcing 42) Problems that should be avoided when identifying relevant costs include all of the following EXCEPT: A) assuming all variable costs are relevant B) assuming all fixed costs.
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52) As part of his job as cost analyst, Max Thompson collected the following information concerning the operations of the Machining Department: ObservationMachine-hoursTotal Operating Costs January4,000$45,000 February4,60049,500 March3,80045,750 April4,40048,000 May4,50049,800 Required: a.Use the high-low method to determine the estimating cost function with machine-hours as the cost driver. b.If June's estimated machine-hours total 4,200, what are the total estimated.
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22) Match each of the following items with one or more of the denominator-level capacity concepts by putting the appropriate letter(s) by each item: a.Theoretical capacity b.Practical capacity c.Normal capacity utilization d.Master-budget capacity utilization 1.Reduces theoretical capacity by considering unavoidable operating interruptions 2.Producing at full efficiency all the time 3.Measures capacity levels in terms of demand 4.Level of.
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82) In a one-time special order situation, if the price offered by the buyer is less than the absorption cost per unit, the special order may still be profitable since absorption costs include allocated fixed manufacturing overhead. 83) In relevant cost analysis, managers should avoid incorrect general assumptions and beware of.
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11) Machine-hours is a more economically plausible cost driver of machine maintenance than number of direct manufacturing labor-hours. 12) The larger the vertical difference between actual costs and predicted costs the better the goodness of fit. 13) Choosing an economically plausible cost driver for indirect costs is fairly simple and.
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15) Throughput costing is also referred to as super-variable costing. 16) When production quantity exceeds sales, throughput costing results in reporting lower operating income than variable costing. 17) Throughput costing provides more incentive to produce for inventory than either variable costing or, especially, absorption costing. 18) A company may use absorption costing.
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1) A decision model involves: A) only quantitative analyses B) both quantitative and qualitative analyses C) only qualitative analyses D) a manager's instinct 2) Feedback regarding previous actions may affect: A) future predictions B) implementation of the decision C) the decision model D) All of these answers are correct. 3) Place the following steps from.
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1) Determining which products should be produced when the plant is operating at full capacity is referred to as: A) an outsourcing analysis B) production scheduling analysis C) a product-mix decision D) a short-run focus decision 2) Product mix decisions: A) have a long-run focus B) help determine how to.
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11) The new cost analyst in your accounting department has just received a computer-generated report that contains the results of a simple regression program for cost estimation. The summary results of the report appear as follows: VariableCoefficientStandard Errort-Value Constant$71.23$16.022.24 Independent variable$1,030.25$205.402.74 r2 = 0.75 Required: a.What is the cost estimation equation according to.
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1) Practical capacity is the denominator-level concept that: A) reduces theoretical capacity for unavoidable operating interruptions B) is the maximum level of operations at maximum efficiency C) is based on the level of capacity utilization that satisfies average customer demand over periods generally longer than one year D) is based.
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17) Decisions about whether a producer of goods or services will insource or outsource are also called make-or-buy decisions. 18) When a firm maximizes profits it will simultaneously minimize opportunity costs. 19) In a make-or-buy decision when there are alternative uses for capacity, the opportunity cost of idle capacity is irrelevant..
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21) When deciding to accept a one-time-only special order from a wholesaler, management should do all of the following EXCEPT: A) analyze product costs B) consider the special order's impact on future prices of their products C) determine whether excess capacity is available D) verify past design costs for the.
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Answer the following questions using the information below: For Alice Company, labor-hours are 25,000 and wages $94,000 at the high point of the relevant range, and labor-hours are 15,000 and wages $70,000 at the low point of the relevant range. 24) What is the slope coefficient per labor-hour? A) $4.67 B).
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12) How does the capacity level chosen to compute the budgeted fixed overhead cost rate affect the production-volume variance? 13) Discuss the three methods to dispose of production volume variance. Answer the following questions using the information below: Ms. Janice Meyers, the company president, has heard that there are multiple breakeven.
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1) The ideal database contains: A) numerous cost driver observations B) reliably measured observations C) cost driver observations spanning a wide range D) All of these answers are correct. 2) Data collection problems arise when: A) data are recorded electronically rather than manually B) accrual-basis costs are used rather than.
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10) Bosely Corporation is in the business of selling computers.  The following expenses were incurred in March 2011: Fixed manufacturing costs$75,000 Fixed nonmanufacturing costs$35,000 Unit selling price$1,200 Variable manufacturing cost$700 Units produced1,500 What will be the breakeven point if variable costing is used? A) 150 units B) 220 units C) 157 units D) 92 units 11) The breakeven points are the.
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1) Theoretical capacity: A) represents real capacity available to the company B) provides the best perspective of actual long-run costs C) when used for product costing results in the lowest cost estimate of the four capacity options D) replicates the cost of capacity in a competitor's cost structure 2) The.
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7) ________ would be a consideration in a make-or-buy decision. A) Excess capacity B) Rental income from unused facilities C) Variable factory overhead D) All of the above are correct. 8) If a company has excess capacity, the most it would pay for buying a product that it currently makes would be the: A) total variable.
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