BASIC COST CONCEPT REVIEW PART 3

mixed cost is also known as

• step fixed cost

• discretionary cost

• semi variable cost

• committed fixed cost

Which of the following cost estimation methods relies only on two data points?

• account analysis

• high-low method

• scattergraph

• least square regression method

Which of the following statements is correct?

• variable costs are constant on a per-unit basis and are constant in total as activity changes

• Fixed costs are constant on a per-unit basis and change in total as activity changes

• Fixed costs are constant on a per-unit basis and constant in total as activity changes

• variable costs are constant on a per-unit basis and changes in total as activity changes

The variable cost graph appear as

• vertical line

• a horizontal line

• a diagonal line that slopes downward to the right

• a diagonal line that slopes upward to the right

Calamansi Company recently conducted a least squares regression analysis to predict selling expenses. The company has constructed the following regression equation: Y = 500,000 + 8X. Which of the following statements is incorrect if the primary cost driver is the number of units sold?

• X represents the number of hours worked during the period

• For each unit sold, total selling expenses will increase by 8.00

• The company anticipates 500,000 of fixed selling expenses

• Y represent total selling expenses

the relationship between cost and activity is termed

• cost analysis

• cost estimation

• cost behavior

• cost approximation

Which of the following would not be classified as product cost?

• insurance on factory plant

• salesman commission

• direct labor

• indirect labor

Which of the following costs is a mixed cost?

• electricity cost of P1.00 per kilowatt hour

• rental cost of P10,000 per month plus 2 machine hours

• straight-line depreciation on factory machines

• salary of factory supervisor

The accounting records of Text Corporation revealed the following: direct materials used, P750,000; direct labor, P1,275,000; factory overhead, P1,125,000; and selling and administrative expenses, P660,000. Text product cost total?

• 2,490,000

• 3,150,000

• 3,810,000

• 2,685,000

The accounting records of Text Corporation revealed the following: direct materials used, P750,000; direct labor, P1,275,000; factory overhead, P1,125,000; and selling and administrative expenses, P660,000. Text's total period cost

• 660,000

• 3,810,000

• 1,410,000

• 2,685,000