1. A least squares regression analysis shows an R-square of 35%. An R-square of this value would indicate:

Multiple Choice

• a neutral relationship between cost and cost driver.

• a poor relationship between cost and cost driver and therefore a new cost driver should be chosen.

• an excellent relationship between cost and cost driver and therefore the equation can be relied upon.

• that the relationship is unknown by only reviewing the R-square.

2.

Per Unit @ 4,000 units	Total @ 4,000 units	Per Unit @ 3,700 units	Total @ 3,700 units
Variable Costs	$6.25
Fixed Costs			$8.15
Total Costs

Based on the above chart, what is total fixed costs at 4,000 units?

Multiple Choice

• $25,000

• $23,125

• $30,155

• $32,600

3. When using a flexible budget, a decrease in activity within the relevant range:

Multiple Choice

• increases variable cost per unit.

• increases total costs.

• decreases total variable costs.

• decreases fixed cost per unit.

4.

Per Unit @ 2,000 units	Total @ 2,000 units	Per Unit @ 3,500 units	Total @ 3,500 units
Variable Costs		$24,000
Fixed Costs			$21.00
Total Costs

Based on the above chart, what would be the total variable costs at 3,500 units?

Multiple Choice

• $42,000

• $24,000

• $73,500

• $291.67