Cost Behavior & Estimation Quick Test

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Note: Some of the following test questions may not have been covered in the Explanation or Practice Quiz for this topic. For more insight regarding a specific question, use the search box at the top of the page.

1. Prior to using a cost estimation technique, it is prudent to first prepare a __________ of the activity and its related cost.
2. A cost or the volume of the related activity that is not consistent with the other observations plotted on a scattergraph is referred to as an __________.
3. The total dollar amount of a fixed cost is assumed to remain unchanged within a relevant __________ of activity or volume.
4. A statistical method for determining the formula of the best fitting line between costs and volume or activities is __________ analysis.
5. A cost that is part fixed and part variable is referred to as a semivariable or __________ cost.
6. When there is an increase in volume within a reasonable range, the variable cost per unit is assumed to __________.
7. As volume increases within a reasonable range, the fixed costs per unit will __________.
8. Within a relevant range of activity, fixed costs do not change __________.
9. In relationship to the machine hours used to apply manufacturing overhead to products, which of the following is likely to be a fixed manufacturing cost?
10. When graphing the cost of electricity at various levels of machine hours, the dollars of total electricity costs are indicated on the __________.
11. In the cost equation, y = a + bx, the variable cost per unit of activity is represented by __________.
12. The cost equation, y = a + bx, implies that a __________ relationship exists.
13. In the cost equation, y = a + bx, “y” is the __________.
14. In the cost equation, y = a + bx, “x” is the __________.
15. In the cost equation y = a + bx, “a” is the __________.
16. When graphing a cost that is linear, the amount of the fixed cost is the point that intercepts the __________.
17. The slope of the total cost line reflects the __________ cost rate per unit.
Use the following information for answering Questions 18 - 20:
The amounts of a company's monthly electric bills and the number of hours that the production machines were operating between the meter reading dates shown on the electric bills were as follows:
18. Using the high-low method, the variable cost of electricity per machine hour is $__________.
19. Using the high-low method, the amount of fixed cost per month is $__________.
20. When the number of machine hours are 2,730 the estimated amount of the electricity cost is $__________.

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Cost Behavior & Estimation(Quick Test)

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