1. The ________________________ is a variable whose valuedepends on the value of another variable.

2. Graphically, the ______________ is the point at which thecost line intercepts the cost (vertical) axis.

3. An advantage of the high-low method is that it___________.

4. The percentage of variability in the dependent variableexplained by an independent variable is called the____________________________________.

5. The spreadsheet regression program supplies more than theestimates of the coefficients; it also provides information thatcan be used to see how ________ the cost equation is which is afeature not available for the high-low method.

6. Knowing how costs change as output changes is essentialto a. planning and controlling. b. controlling and decision making. c. planning, controlling and decision making. d. None of these are correct.

7. A fixed cost within the relevant range a. increases in total as output decreases. b. does not change in total as output changes. c. decreases in total as output increases. d. All of these are correct.

8. Which of the following would be an example of a fixedcost? a. wages for an assembly line worker b. electric bill c. depreciation on equipment d. materials used

9. Which of the following would not be an example of afixed cost? a. glue used to put together tables b. insurance on factory building c. depreciation on factory building d. property taxes

10. Discretionary fixed costs a. cannot be easily changed. b. often involve a long-term contract. c. can be changed easily at management's discretion. d. increase as output increases.

11. Which of the following is an example of a discretionaryfixed cost? a. depreciation of equipment b. advertising costs c. rental of machinery d. insurance on automobiles

Figure 3-2. Lassiter Toys, Inc. Cost of Materials No. of toys produced Total cost of materials 100,000 $20,000 200,000 40,000 300,000 60,000

12. Refer to Figure 3-2. The cost behavior of the materials costis a. fixed b. variable c. committed d. discretionary

13. Refer to Figure 3-2. What is the materials cost per unit ofoutput? a. $0.10 b. $0.20 c. $0.60 d. $0.40

14. Refer to Figure 3-2. What should the total materials cost beat a production level of 220,000 toys? a. $44,000 b. $88,000 c. $22,000 d. $132,000

Figure 3-6. Taran Company incurred the following costs for the months ofJanuary and February. Type of Cost January February Insurance $ 5,000 $ 5,000 Utilities 4,000 5,000 Depreciation 3,500 3,500 Materials 10,000 20,000

15. Refer to Figure 3-6. From the information above we canassume that a. insurance and depreciation are fixed costs. b. output decreased from January to February. c. output stayed the same from January to February. d. insurance is a mixed cost.