38. The least-squares regression method can be used to approximate a cost function. A disadvantage of...

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Accounting

38. The least-squares regression method can be used toapproximate a cost function. A disadvantage of this method is________.
A) it requires a lot of prior cost data
B) it does not use all the available data points
C) it requires subjective placement of the line
D) it is more subjective than engineering analysis
Answer: A
Diff: 2
LO: 3-4
AACSB: Reflective thinking skills
Learning Outcome: Discuss and use various methods to estimate thevariable and fixed costs portions of a mixed cost
39. Which of the following types of costs cannot be specificallyand exclusively identified with a cost object in an economicallyfeasible manner?
A) direct costs
B) indirect costs
C) variable costs
D) fixed costs
40. The monthly indirect production cost is Depreciation Expenseon Production Equipment of $125,000. The cost allocation base isnumber of machine hours. The expected level of production in amonth is 12,500 machine hours. What is the amount of indirectproduction cost per unit assigned to Product A and Product B.Product A requires 15 machine hours per unit. Product B requires 25machine hours per unit.
Product A Product B
A) $1 $2
B) $10 $20
C) $100 $200
D) none of the above
41. Which of these costs is a direct cost for a manufacturedwood table?
A) Rent Expense for factory building
B) Wood used to manufacture table
C) Depreciation Expense on factory equipment
D) Salary Expense of factory supervisor
42. Monthly indirect production costs are $650,000. Thecost-allocation base for indirect costs is machine hours. Thebudgeted capacity for the month is 50,000 machine hours. Product Aused 7,500 machine hours, Product B used 20,000 machine hours andProduct C used 23,500 machine hours. How much of the indirect costsare allocated to Products B and C?
Product B Product C
A) $26,000 $30,550
B) $160,000$275,000
C) $260,000 $305,500
D) none of the above
43. Depreciation Expense on the Heating and Air ConditioningEquipment for the factory of $80,000 is allocated to fivedepartments. The cost-allocation base for this expense is thenumber of cubic feet, which equals 100,000 cubic feet. Informationfor five departments is below:
Department Square Feet Cubic Feet
Department A 15,000 15,000
Department B 5,000 5,000
Department C 30,000 20,000
Department D 20,000 35,000
Department E 10,000 25,000
How much Depreciation Expense is allocated to DepartmentC?
A) $2,500
B) $7,500
C) $16,000
D) $18,750

Answer & Explanation Solved by verified expert

4.3 Ratings (588 Votes)

39 Indirect costs cannot be specifically and exclusively identified with a cost object in an economically feasible manner Hence correct option is B Direct costs whether variable or fixed can be easily identified with a cost object 40 Depreciation expense 125000 Expected machine hours 12500 Hence pre determined overhead rate See Answer

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38. The least-squares regression method can be used toapproximate a cost function. A disadvantage of this method is________.A) it requires a lot of prior cost dataB) it does not use all the available data pointsC) it requires subjective placement of the lineD) it is more subjective than engineering analysisAnswer: ADiff: 2LO: 3-4AACSB: Reflective thinking skillsLearning Outcome: Discuss and use various methods to estimate thevariable and fixed costs portions of a mixed cost39. Which of the following types of costs cannot be specificallyand exclusively identified with a cost object in an economicallyfeasible manner?A) direct costsB) indirect costsC) variable costsD) fixed costs40. The monthly indirect production cost is Depreciation Expenseon Production Equipment of $125,000. The cost allocation base isnumber of machine hours. The expected level of production in amonth is 12,500 machine hours. What is the amount of indirectproduction cost per unit assigned to Product A and Product B.Product A requires 15 machine hours per unit. Product B requires 25machine hours per unit.Product A Product BA) $1 $2B) $10 $20C) $100 $200D) none of the above41. Which of these costs is a direct cost for a manufacturedwood table?A) Rent Expense for factory buildingB) Wood used to manufacture tableC) Depreciation Expense on factory equipmentD) Salary Expense of factory supervisor42. Monthly indirect production costs are $650,000. Thecost-allocation base for indirect costs is machine hours. Thebudgeted capacity for the month is 50,000 machine hours. Product Aused 7,500 machine hours, Product B used 20,000 machine hours andProduct C used 23,500 machine hours. How much of the indirect costsare allocated to Products B and C?Product B Product CA) $26,000 $30,550B) $160,000$275,000 C) $260,000 $305,500D) none of the above43. Depreciation Expense on the Heating and Air ConditioningEquipment for the factory of $80,000 is allocated to fivedepartments. The cost-allocation base for this expense is thenumber of cubic feet, which equals 100,000 cubic feet. Informationfor five departments is below:Department Square Feet Cubic FeetDepartment A 15,000 15,000Department B 5,000 5,000Department C 30,000 20,000Department D 20,000 35,000Department E 10,000 25,000How much Depreciation Expense is allocated to DepartmentC?A) $2,500B) $7,500C) $16,000D) $18,750