Q1. The high-low method uses cost and activity data from just two periods to establish a cost formula.
a. True
b. False
Q2.Contribution margin equals revenue minus all variable costs.
a. True
b. False
Q3.When more than one factor causes variations in the variable element of a mixed cost, multiple regression analysis should be used.
a. True
b. False
Q4.The contribution income statement organizes costs according to behavior.
a. True
b. False
Q5.The term "relevant range" refers to the levels of activity within which the assumptions relative to cost behavior are valid.
a. True
b. False
Q6.The high-low method is generally more accurate than the least-squares regression method in analyzing cost behavior.
a. True
b. False
Q7.In the least-squares regression method, total cost is considered to be "Y", the dependent variable.
a. True
b. False
Q8.On an income statement prepared by the traditional approach, costs are organized and presented according to function.
a. True
b. False
Q9.The following costs are all examples of committed fixed costs: depreciation on buildings, advertising, insurance, and management development and training.
a. True
b. False
Q10.The least-squares regression method computes the regression line that minimizes the sum of the squared deviations from the plotted points to the line.
a. True
b. False