Podcast
Questions and Answers
Which costing method assigns only variable manufacturing costs to products, expensing fixed manufacturing overhead as period costs?
Which costing method assigns only variable manufacturing costs to products, expensing fixed manufacturing overhead as period costs?
- Variable costing (correct)
- Absorption costing
- Process costing
- Job costing
Contribution margin is calculated as sales revenue plus variable expenses.
Contribution margin is calculated as sales revenue plus variable expenses.
False (B)
What is a statistical measure used to assess the predictability of a multiple regression model, compensating for each additional variable in the model?
What is a statistical measure used to assess the predictability of a multiple regression model, compensating for each additional variable in the model?
Adjusted R-squared
The band of volume where total fixed costs remain constant and the variable cost per unit remains constant is known as the ______.
The band of volume where total fixed costs remain constant and the variable cost per unit remains constant is known as the ______.
Which of the following describes a cost behavior that remains fixed over a small range of activity and then jumps to a different fixed level with moderate changes in volume?
Which of the following describes a cost behavior that remains fixed over a small range of activity and then jumps to a different fixed level with moderate changes in volume?
Match the following cost analysis methods with their descriptions:
Match the following cost analysis methods with their descriptions:
In regression analysis, the independent variable is also referred to as the outcome variable.
In regression analysis, the independent variable is also referred to as the outcome variable.
What type of income statement organizes costs by behavior (variable costs or fixed costs) rather than by function?
What type of income statement organizes costs by behavior (variable costs or fixed costs) rather than by function?
What term describes abnormal data points that do not fall in the same general pattern as the other data points?
What term describes abnormal data points that do not fall in the same general pattern as the other data points?
Which of the following best describes 'committed fixed costs'?
Which of the following best describes 'committed fixed costs'?
Flashcards
Absorption Costing
Absorption Costing
A costing method where products 'absorb' both fixed and variable manufacturing costs.
Variable Costing
Variable Costing
A costing method that assigns only variable manufacturing costs to products; fixed MOH are expensed as period costs.
Contribution Margin
Contribution Margin
Sales revenue minus variable expenses.
Outliers
Outliers
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Adjusted R-squared
Adjusted R-squared
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Cost Behavior
Cost Behavior
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Account Analysis
Account Analysis
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Step Costs
Step Costs
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Cost Equation
Cost Equation
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High-Low Method
High-Low Method
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Study Notes
- Absorption costing is a costing method that includes both fixed and variable manufacturing costs in the cost of a product.
- Variable costing is a costing method that assigns only variable manufacturing costs to products, with fixed manufacturing costs expensed as period costs (also known as direct costing).
- Contribution margin is sales revenue minus variable expenses.
- Outliers are abnormal data points that do not fit the general pattern of other data points.
- Adjusted R-squared is a statistical measure to assess the predictability of a multiple regression model, increasing only if the added independent variable improves the model more than expected by chance.
- Cost behavior is how costs change as volume changes.
- Account analysis is a method for determining cost behavior based on a manager's judgment in classifying each general ledger account as variable, fixed, or mixed.
- Step costs are fixed across a small range of activity, then jump to a different fixed level with moderate volume changes.
- Cost Equation is a mathematical equation for a straight line expressing how a cost behaves.
- High-low method is a method for determining cost behavior based on the highest and lowest historical data points.
- Independent variable (x) is the explanatory or predictor variable in regression analysis.
- Regression analysis is a statistical procedure using all historical data points to determine the line that best fits the data.
- R-squared, or the coefficient of determination, indicates how well the regression line fits the data points, showing the percentage of variance in the dependent variable (y) predictable from the independent variable (x).
- Simple linear regression is a regression analysis with only one x-variable.
- The relevant range is the volume band where total fixed costs and variable cost per unit remain constant.
- Multiple regression is a regression analysis with more than one independent variable to predict a dependent variable.
- A scatterplot is a graph plotting historical cost and volume data.
- The dependent variable (y) is the outcome variable in a regression analysis.
- A contribution margin income statement organizes costs by behavior (variable or fixed) rather than by function.
- Committed fixed costs are fixed costs locked in due to previous management decisions, with little management control in the short run.
- Discretionary fixed costs are fixed costs resulting from annual management decisions and controllable in the short run.
- Curvilinear costs are a cost behavior that is not linear (not a straight line).
- Mixed costs change but not in direct proportion to volume changes, having both variable and fixed cost components.
- Variable costs are costs incurred for each unit of activity, with total variable costs changing in direct proportion to volume.
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