Which statement is FALSE regarding the high-low method to approximate a linear cost function? A) Draw a line between the representative high and low points. B) The points at which the line intersects the Y-axis is the estimate of variable costs. C) Outliers should be removed from the analysis. D) The first step is to plot the historical data points on a graph. The Rockford Company used regression analysis to predict the annual cost of utilities. The results were as follows: The total fixed cost is. A) $20.37 B) $2, 500 C) $595 D) none of the above Cat Company makes metal signs for business and residences. These signs are made of sheet metal, which the owner paints by hand. The owner is concerned that he does not have a good measure of support costs for the signs. Currently, he predicts support costs to be 30 percent of the cost of materials. Close investigation of the business reveals that $10 per direct labor hour is a more plausible and reliable support cost measure. Cat Company has the following information available: Using direct labor hours as the cost driver, what amount of support costs is assigned to the small sign? A) $50 B) $200 C) $160 D)$110 Process engineers at Starbucks investigate methods to reduce the time to roast coffee beam and to better preserve their flavor. This is an example of the or the functions of the value chain. A) research and development; design of products, services or processes B) production; engineering C) research and development; production D) design of products, services or processes; production Which statement is FALSE regarding the high-low method to approximate a linear cost function? A) Draw a line between the representative high and low points. B) The points at which the line intersects the Y-axis is the estimate of variable costs. C) Outliers should be removed from the analysis. D) The first step is to plot the historical data points on a graph. The Rockford Company used regression analysis to predict the annual cost of utilities. The results were as follows: The total fixed cost is. A) $20.37 B) $2, 500 C) $595 D) none of the above Cat Company makes metal signs for business and residences. These signs are made of sheet metal, which the owner paints by hand. The owner is concerned that he does not have a good measure of support costs for the signs. Currently, he predicts support costs to be 30 percent of the cost of materials. Close investigation of the business reveals that $10 per direct labor hour is a more plausible and reliable support cost measure. Cat Company has the following information available: Using direct labor hours as the cost driver, what amount of support costs is assigned to the small sign? A) $50 B) $200 C) $160 D)$110 Process engineers at Starbucks investigate methods to reduce the time to roast coffee beam and to better preserve their flavor. This is an example of the or the functions of the value chain. A) research and development; design of products, services or processes B) production; engineering C) research and development; production D) design of products, services or processes; production
