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Unformatted text preview: ff: 2 Terms: linear cost function Objective: 4 AACSB: Reflective thinking 28) A positive slope of a regression line indicates that total costs are lower for higher values of the cost driver. Answer: FALSE Explanation: A positive slope of a regression line indicates that costs are higher for higher values of the cost driver. Diff: 2 Terms: regression analysis Objective: 4 AACSB: Reflective thinking 29) The high low method is more accurate than the regression method of estimating a cost function. Answer: FALSE Explanation: The regression method is Diff: 1 Terms: highlow method, regression analysis Objective: 4 AACSB: Reflective thinking 30) If inaccurate cost estimates are too high, then a company may unknowingly reward a manager for poor performance. Answer: TRUE Diff: 3 Terms: cost estimation Objective: 4 AACSB: Ethical reasoning 31) Simple regression is known as "simple" because it is much less complex than the highlow method. Answer: FALSE Explanation: Simple regression is known as "simple" because it includes only one cost driver. Diff: 2 Terms: simple regression Objective: 4 AACSB: Reflective thinking 32) The high low method involves choosing the period of highest cost driver activity and the period of lowest cost driver activity. Answer: TRUE Diff: 2 Terms: highlow method Objective: 4 AACSB: Reflective thinking 33) A strength of the highlow method of cost estimation is that the high point and the low point are representative of all data points. Answer: FALSE Explanation: A weakness of the highlow method of cost estimation is that the high point and the low point are not representative of all data points. Diff: 2 Terms: highlow method Objective: 4 AACSB: Reflective thinking 34) In analysis, the term "goodness of fit" indicates the strength of the relationship between the cost driver and the costs. regression Answer: TRUE Diff: 2 Terms: regression analysis Objective: 4 AACSB: Reflective thinking 35) Accurate cost estimation is useful both in understanding past cost relationships and as a means of predicting costs. Answer: TRUE...
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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 .
 Spring '08
 BROWN

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