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170. Blacken Company manufactures motorcycles. The company’s management accountant wants to calculate the fixed
and variable costs associated with utility cost incurred by the factory. Data for the past five months were collected.
Utility Machine
Month cost hours
March $30,255 2,200
April 32,750 2,525
May 34,712 2,710
June 31,850 2,410
July 30,720 2,290
Using a regression program, the yearly utility cost equation (with all variables to the nearest penny) is
a. total utility cost = $127,569.60 + ($8.83 × machine hours).
b. total utility cost = $10,630.80 + ($8.83 × machine hours).
c. total utility cost = $8.83 + ($10,630.80 × machine hours).
d. total utility cost = $10,630.80 − ($8.83 × machine hours).
171. The ________________ is the range of output over which the assumed cost relationship is valid for the normal
operations of a firm.
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172. A cost __________ is a casual factor that measures the output of the activity that leads costs to change.
173. __________________ is the general term for describing whether a cost changes when the level of output changes.
174. The fabric used to manufacture curtains is an example of a material or a ____________ cost.
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175. Depreciation on factory equipment would be an example of a(n) _________ cost.
176. A type of cost behavior where the true total cost function is increasing at a decreasing rate is called
______________.
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177. Rental expense for a warehouse is an example of a ___________ cost.
178. Fixed costs that cannot be easily changed and typically involve a long-term contract are known as
___________________.
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179. A fixed cost that management can easily decide to increase or decrease is known as a _________________.
180. ___________________ are costs that in total vary in direct proportion to changes in output within the relevant range.
181. A _______________ displays a constant level of cost for a range of output and then jumps to a higher level of cost at
some point.
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182. _______________________ are costs that have both a fixed and a variable component.
183. ______________________________ is a statistical way to find the best-fitting line through a set of data points.
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184. __________________________ is critically important in determining cost behavior and is by far the most widely
used method in practice.
185. The _________________________ is a way to see the cost relationship by plotting the data points on a graph.
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186. The ________________________ is a variable whose value depends on the value of another variable.
187. Graphically, the ______________ is the point at which the cost line intercepts the cost (vertical) axis.
188. An advantage of the high-low method is that it ___________.
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189. _______________ assigns all manufacturing costs to the product.
190. When using _______________ a company only assigns variable manufacturing costs to the product.
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191. Generally accepted accounting principles require ______________ for external reporting.
192. The ___________________ income statement groups expenses according to function.
193. The _______________ income statement groups expenses according to cost behavior.
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194. Absorption costing treats fixed factory overhead as a ____________.
195. Variable costing treats fixed factory overhead as a ______________.
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196. For internal reporting ________________ is an important managerial tool because it provides vital cost information
for decision making and control.
197. The percentage of variability in the dependent variable explained by an independent variable is called the
____________________________________.
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198. The spreadsheet regression program supplies more than the estimates of the coefficients; it also provides information
that can be used to see how ________ the cost equation is which is a feature not available for the high-low method.
199. factory supervisor’s salary
200. factory supplies
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201. direct labor
202. factory insurance
203. controller’s salary
204. depreciation
205. direct materials
206. indirect materials
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207. property taxes
208. advertising
209. cost of leasing
210. travel costs
211. cost of executive training seminars
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212. depreciation
213. rent of building
214. salary of receptionist
215. a factor that causes a change in cost or activity
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216. may be discretionary or committed
217. total cost depends on the level of output
218. a description of how a cost changes when the level of output changes
219. the range of output over which the assumed cost relationship is valid
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220. cost of windshields
221. cost of assembly line workers
222. depreciation on robotic equipment
223. cost of car stereos
224. cost of transporting cars to dealerships
225. cost of inspections
226. factory supervisor’s salary
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227. cost of rework
228. cost of lubricating machinery
229. sales commissions
230. salary of chief executive officer
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231. real estate taxes
232. license fees on automobiles
233. factory supplies
234. rental cost of warehouse
235. raw materials