Horn_CH_10TB 13

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Unformatted text preview: ion Objective: 2 AACSB: Reflective thinking 8) In a graphical display of a cost function, the steepness of the slope represents the total amount of fixed costs. Answer: FALSE Explanation: In a graphical display of a cost function, the constant or the yintercept represents the amount of fixed costs. Diff: 1 Terms: cost function, linear cost function Objective: 2 AACSB: Reflective thinking 9) The longer the time horizon, the more likely that a cost will have a fixed cost behavior. Answer: FALSE Explanation: The longer the time horizon, the more likely a cost will be variable. Diff: 2 Terms: cost function, linear cost function Objective: 2 AACSB: Reflective thinking 10) Outside of the relevant range, variable and fixed cost-behavior patterns may change. Answer: TRUE Diff: 2 Terms: cost function, linear cost function Objective: 2 AACSB: Reflective thinking 11) Any linear cost function can be graphed by knowing only the slope coefficient. Answer: FALSE Explanation: A linear function can be graphed if the slope coefficient and the intercept are known. Diff: 1 Terms: cost function, linear cost function Objective: 2 AACSB: Reflective thinking 12) Knowing the proper relevant range is essential to properly classify costs. Answer: TRUE Diff: 1 Terms: cost function Objective: 2 AACSB: Reflective thinking 13) It can be inferred that when there is a high correlation between two variables, one is the cause of the other. Answer: FALSE Explanation: It cannot be inferred that a high correlation between two variables indicates that one is the cause of the other. A high correlation simply indicates that the variables move together. Diff: 2 Terms: cost function Objective: 2 AACSB: Analytical skills 14) An of a physical cause-and-effect relationship is when additional units of production increase total direct material costs. example Answer: TRUE Diff: 2 Terms: cost function Objective: 2 AACSB: Analytical skills 15) Managers use past data to create a cost function and then use the exact information...
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This note was uploaded on 12/12/2012 for the course SB 305 taught by Professor Brown during the Spring '08 term at Clarkson University .

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