Horn_CH_10TB 13

Costobservations d relyonthe independentvariable

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Unformatted text preview: ACSB: Analytical skills 129) An inaccurate cost function with a slope coefficient that is estimated too low may MOST likely result in: A) predicting total costs that are too high B) initiating cost cutting measures when they are unnecessary C) evaluating a weak manager as having strong performance D) promoting a product that is actually more profitable than budgeted Answer: B Diff: 3 Terms: cost function, slope coefficient Objective: 5 AACSB: Analytical skills 130) An inaccurate cost function with a constant that is estimated too high may MOST likely result in: A) evaluating a weak manager as providing strong performance B) promoting a product that is actually less profitable than budgeted C) predicting total costs that are too low D) replicating processes that are truly cost saving Answer: A Diff: 3 Terms: cost function, cost estimation Objective: 5 AACSB: Analytical skills 131) A cost function with a lower constant than a year ago could indicate all of the following EXCEPT: A) last year's cost function was inaccurate B) a new operations manager is being effective C) the sales commission percentage has decreased D) insurance premiums have decreased Answer: C Diff: 3 Terms: cost function, cost estimation Objective: 5 AACSB: Reflective thinking 132) A cost function with a lower slope coefficient than a year ago could indicate that: A) total variable costs have decreased B) new cost- cutting initiatives are beneficial C) production has decreased D) rental costs have decreased Answer: B Diff: 3 Terms: cost function, cost estimation, slope coefficient Objective: 5 AACSB: Analytical skills 133) If machine maintenance is scheduled at a time when production is at a low level, then: A) low production is the cost driver of high repair costs B) an understanding of operations is needed to determine an appropriate cost driver C) low production should be avoided since it is the cause of machine maintenance D) machine maintenance cannot be accurately predicted Answer: B Diff: 3 Terms: cost function, cost estimation Objective: 5 AACSB: Reflective thinking 134) Goodness -of-fit measures how well the predicted values in a cost estimating equation: A) match the cost driver B) determine the level of activity C) match the actual cost observations D) rely on the independent variable Answer: C Diff: 2 Terms: cost function, cost estimation, regression analysis Objective: 5 AACSB: Reflective thinking 135) A steeply sloped regression line indicates: A) a strong relationship...
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