QUESTION 1 Which of the following is not an example of a discretionary fixed cost? O factory supervisor's salary advertising costs Christmas bonus payments direct materials QUESTION 2 Managerial judgment O is critically important in determining cost behavior helps to refine statistical estimation results is enhanced by experience all of these are correct QUESTION 3 Which of the following would be an example of a fixed cost? raw materials sales commissions utilities property taxes QUESTION 4 Discretionary fixed costs O cannot be easily changed often involve a long-term contract can be changed relatively easy at management discretion increase as output increases QUESTION 5 Which of the following would probably be a fixed cost in a fast-food restaurant? O cost of hamburger O cost of french fries shift manager's salary utility cost QUESTION 6 Figure 3.10. The following cost formula was developed using the monthly data for an accounting firm. Total cost = $87,100 + (5210 x number of tax retums) Refer to Figure 3-10. The term $87,100 is the independent variable O is the dependant variable is the intercept is the variable rate IT QUESTION 7 Figure 3-2 Lassiter Toys, Inc. Cost of Materials No of toys, produced 100,000 200,000 300,000 Total cost of materials $20,000 $40,000 $60,000 Refer to Figure 3-2. What is the materials cost per unit of output? 05.10 O $.20 O $.60 $.40 QUESTION 8 Advantages of the method of least squares over the high-low method include all of the following EXCEPT O A statistical method is used to mathematically derive the cost function Only two points are used to develop the cost function The squared differences between actual observations and the line (cost function) are minimized. Al the observations have an effect on the cost function