Comparing least-squares regression to high-low estimation.
1. An object to which costs are assigned is called:
a.A value chain.
b.A cost objective.
c.A cost pool.
d.Overhead.
2. Customer profitability analysis would trace which of the following to each customer?
a.Sales revenue
b.Cost of goods sold
c.Cost of filling the customer's order
d.All of the above
3. Customer profitability analysis might result in:
a.dropping some customers that are unprofitable.
b.lowering price or offering incentives to profitable customers.
c.giving incentives to all customers to place orders online.
d.All of the above.
4. When an outside market exists for an intermediate product that is perfectly competitive, the ideal method of transfer pricing is generally:
a.The one that creates the highest margin to the selling unit.
b.The price at which the product sells in the external market.
c.One that is higher than what the outside market is quoting.
d.Based on management accounting numbers.
5. The following information pertains to Cutter Company's weekly activity and total costs:
|
Volume of Activity
|
Total Cost
|
|
110 units
|
$1,400
|
|
120 units
|
$1,500
|
|
130 units
|
$1,600
|
What is the estimated variable cost per unit of Cutter's product?
a.$10.00
b.$12.50
c.$300
d.$12.73
6. Comparing least-squares regression to high-low estimation:
a.Least-squares regression is preferred to high-low estimation because with this method, the computer can make all the decisions after data entry
b.Least-squares regression provides superior estimates to high-low estimation when using unreliable data
c.Least-squares regression provides a means of estimating how well the data fit the model
d.All of the above