1. A mixed cost:
A. Increases and decreases directly and proportionately with changes in volume.
B. Changes in response to a change in volume, but not proportionately.
C. Increases if volume increases, but remains constant if volume decreases.
D. Changes inversely in response to a change in volume.
2. A disadvantage of the high-low method of cost analysis is that:
A. it cannot be used when there are a very large number of observations.
B. it is too time consuming to apply.
C. it uses two extreme data points, which may not be representative of normal conditions.
D. it relies totally on the judgment of the person performing the cost analysis.
3. Research & Development cost would be considered a:
A. Unit Level Cost
B. Product Level Cost
C. Batch Level Cost
D. Facility Level Cost
4. The cost of setups would be considered a:
A. Unit Level Cost
B. Product Level Cost
C. Batch Level Cost
D. Facility Level Cost
5. Relevant range
A. is the range of activity over which our assumptions about cost behavior are true.
B. only applies to fixed costs.
C. is defined as total sales minus break-even sales.
D. increases in total as the activity level increases.
6. The coefficient of determination or R2:
A. should be at least 0.75 to indicate a “good fit”
B. should be less than 0.75 to indicate a “good fit”
C. Should exceed 1.0
D. Should be below 0.
7. Plant maintenance would be considered a:
A. Unit Level Cost
B. Facility Level Cost
C. Batch Level Cost
D. Product Level Cost
8. Which of the following would be an example of a mixed cost:
A. Factory Rent
B. CFO Salary
C. Electricity Expense
D. Direct Material Cost
9. Consumer recalls is an example of which quality cost?
A. Prevention
B. Appraisal
C. Internal Failure
D. External Failure
10. Rework is an example of which quality cost?
A. Prevention
B. Appraisal
C. Internal Failure
D. External Failure
11. Quality training is an example of which quality cost?
A. Prevention
B. Appraisal
C. Internal Failure
D. External Failure
12. Which of the following would be a fixed cost?
A. Sales Commissions
B. Direct Labor Cost
C. Factory Depreciation
D. Direct Materials.