The new cost analyst in your accounting department has just run a scatter graph
ID: 2418634 • Letter: T
Question
The new cost analyst in your accounting department has just run a scatter graph on Excel with a trend-line for utility cost estimation. The graph shows an r-square factor of .9942. Based upon this, which of the following is true? A. There is a low correlation between machine hours and utilities cost B. 99.42% of utility cost is fixed C. There is a high correlation between machine hours and utilities cost D. Variable costs are $.9942 per machine hour
Orleans Company has a normal range of production volumes between 100,000 and 180,000 units per month. That is considered the relevant range for production cost analysis. If the company expands significantly beyond 180,000 units per month, which of the following would be the most likely expectation?
The fixed costs will remain the same, but the variable cost per unit may change.
The fixed costs may change, but the variable cost per unit will remain the same.
The fixed costs and the variable cost per unit will not change.
Both the fixed costs and the variable cost per unit may change.
The Butler Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Butler Company uses the high-low method and has decided to use it in this situation.
How is the cost function stated?
y = $26,672 + $1.84X
y = $10,112 + $8.64X
y = $21,360 + $10.40X
y = $3,600 + $10.40X
A.The fixed costs will remain the same, but the variable cost per unit may change.
B.The fixed costs may change, but the variable cost per unit will remain the same.
C.The fixed costs and the variable cost per unit will not change.
D.Both the fixed costs and the variable cost per unit may change.
The Butler Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Butler Company uses the high-low method and has decided to use it in this situation.
Month Cost Hours January $40,000 $3,500 February $24,400 $2,000 March $31,280 $2,450 April $36,400 $3,000 May $44,160 $3,900 June $42,400 $3,740
How is the cost function stated?
y = $26,672 + $1.84X
B.y = $10,112 + $8.64X
C.y = $21,360 + $10.40X
D.y = $3,600 + $10.40X
Explanation / Answer
3 - answer is D y = $3,600 + $10.40X
2- d Both the fixed costs and the variable cost per unit may change. both the fixed and variable cost may change due to investment in additional unit of production and due to more disocunt on raw material variable cost may also decrease.
1-B. C. There is a high correlation between machine hours and utilities cost
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