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A high correlation between two variables s and t indicates that:
Answer
s may cause t, or t may cause s
the correlation may be due to random chance
both may be affected by a third variable
All of these answers are correct.
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Take Test: Quiz 1 Chapters 1,2,3,6 and 10.Content
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Name Quiz 1 Chapters 1,2,3,6 and 10
Instructions
Multiple Attempts This Test allows 3 attempts. This is attempt number 1.
Force Completion This Test can be saved and resumed later.
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Question 1
Question 1
The cost function y = 1,000 + 5X:
Answer
has an intercept of 5
is a straight line
has a slope coefficient of 1,000
represents a fixed cost
. 1 points
Question 2
Question 2
The cost function y = 8,000 + 4X:
Answer
has a slope coefficient of 8,000
represents a mixed cost
is a curved line
will intersect the y-axis at 4
. 1 points
Question 3
Question 3
A high correlation between two variables s and t indicates that:
Answer
s may cause t, or t may cause s
the correlation may be due to random chance
both may be affected by a third variable
All of these answers are correct.
. 1 points
Question 4
Question 4
Answer the following questions using the information below:
Katie Enterprises reports the year-end information from 20X4 as follows:
Sales (70,000 units)
$560,000
Cost of goods sold

210,000
Gross Margin
350,000
Operating expenses
200,000
Operating income
$150,000
Katie is developing the 20X5 budget. In 20X5 the company would like to increase selling prices
by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses
are expected to remain constant. Assume that COGS is a variable cost and that operating
expenses are a fixed cost.
Should Katie increase the selling price in 20X5?
Answer
Yes, because sales revenue is increased for 20X5.
No, because sales volume decreases for 20X5.
Yes, because operating income is increased for 20X5.
No, because gross margin decreases for 20X5.
. 1 points
Question 5
Question 5
In which order are the following developed? First to last:
A = Production budget B = Direct materials costs budget
C = Budgeted income statement D = Revenues budget
Answer
ABDC
DCAB
CABD
DABC
. 1 points
Question 6
Question 6
Answer the following questions using the information below:
Daniel, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2,
direct manufacturing labour is $10, and manufacturing overhead is $3 per vase. The following
inventory levels apply to 20X5:

Beginning inventory
Ending inventory
Direct materials
1,000 units
1,000 units

Work-in-process inventory
0 units
0 units
Finished goods inventory
400 units
500 units

What are the 20X5 budgeted costs for direct materials, direct manufacturing labour, and
manufacturing overhead, respectively?
Answer
$2,000; $10,000; $3,000
$2,000; $0; $18,000
$12,000; $60,000; $18,000
$12,200; $61,000; $18,300
. 1 points
Question 7
Question 7
Budgeting provides all of the following EXCEPT:
Answer
a means to anticipate problems
a means to communicate the organisation's short-term goals to its members
support for the management functions of planning and coordination
an ethical framework for decision making
. 1 points
Question 8
Question 8
Line managers who feel that top management does not believe in the budget are MOST likely
to:
Answer
be motivated by the budget
convert the budget to a shorter more reasonable time period
pick up the slack and participate in the budgeting process
spend little time on the budgeting process
. 1 points
Question 9
Question 9
Operating budgets include all of the following EXCEPT:
Answer
the administrative costs budget
the budgeted income statement
the budgeted balance sheet
the revenues budget
. 1 points

Question 10
Question 10
Answer the following questions using the information below:
The following information pertains to the January operating budget for Casey Corporation, a
retailer:
Budgeted sales are $200,000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $150,000 in January
Marketing costs are $3,000 each month
Distribution costs are $5,000 each month
Administrative costs are $10,000 each month
For January, budgeted gross margin is:
Answer
$100,000
$50,000
$60,000
$140,000
. 1 points
Question 11
Question 11
For last year, Lewisburn Manufacturing reported the following:
Revenue $420,000
Beginning inventory of direct materials, January 1 22,000
Purchases of direct materials 146,000
Ending inventory of direct materials, December 31 16,000
Direct manufacturing labour 18,000
Indirect manufacturing costs 40,000
Beginning inventory of finished goods, January 1 35,000
Cost of goods manufactured 104,000
Ending inventory of finished goods, December 31 36,000
Operating costs 140,000
What was Lewisburn's operating income?
Answer
$177,000
$128,000
$280,000
$76,000
. 1 points
Question 12
Question 12
For last year, Lewisburn Manufacturing reported the following:
Revenue $420,000
Beginning inventory of direct materials, January 1 22,000
Purchases of direct materials 146,000

Ending inventory of direct materials, December 31 16,000
Direct manufacturing labour 18,000
Indirect manufacturing costs 40,000
Beginning inventory of finished goods, January 1 35,000
Cost of goods manufactured 104,000
Ending inventory of finished goods, December 31 36,000
Operating costs 140,000
What was Lewisburn's gross margin (or gross profit)?
Answer
$317,000
$152,000
$103,000
$268,000
. 1 points
Question 13
Question 13
Wages paid to machine operators on an assembly line are classified as a:
Answer
manufacturing overhead cost
period cost
direct manufacturing labour cost
direct material cost
. 1 points
Question 14
Question 14
Answer the following questions using the information below:
The Singer Company manufactures several different products. Unit costs associated with Product
ICT101 are as follows:
Direct materials
$60
Direct manufacturing labour
$10
Variable manufacturing overhead
$18
Fixed manufacturing overhead
$32
Sales commissions (2% of sales)
$4
Administrative salaries
$16
Total
$140

What are the period costs per unit associated with Product ICT101?
Answer
$4
$20
$52
$16
. 1 points
Question 15
Question 15
The income statement of a service-sector firm reports:
Answer
period and inventoriable costs but at different times; the reporting varies
period costs only
both period and inventoriable costs
inventoriable costs only
. 1 points
Question 16
Question 16
Cost allocation is:
Answer
the assignment of indirect costs to the chosen cost object
a function of cost tracing
the process of determining the actual cost of the cost object
the process of tracking both direct and indirect costs associated with a cost object
. 1 points
Question 17
Question 17
Answer the following questions using the information below:
Beginning finished goods, 1/1/20X5 $ 40,000
Ending finished goods, 12/31/20X5 33,000
Cost of goods sold 250,000
Sales revenue 600,000
Operating expenses 120,000
What is operating income for 20X5?
Answer
$157,000
$230,000
$107,000
$123,000
. 1 points
Question 18
Question 18
Linking rewards to performance:
Answer

helps to motivate managers
should only be based on financial information
allows companies to charge premium prices
All of these answers are correct.
. 1 points
Question 19
Question 19
________ is the generation of, and experimentation with, ideas related to new products,
services, or processes.
Answer
Design of products, services, or processes
Research and development
Marketing
Production
. 1 points
Question 20
Question 20
A budget:
Answer
aids in the coordination and communication among various business functions
helps translate strategy into actions
is a quantitative expression of a proposed management plan
All of these answers are correct.
. 1 points
Question 21
Question 21
Which statement is FALSE?
Answer
Employees spend more attention on those variables that are not getting measured.
People react to measurements.
"If I can't measure it, I can't manage it."
"What gets measured gets managed."
. 1 points
Question 22
Question 22
Management accounting includes:
Answer
developing budgets
preparing special studies and forecasts
implementing strategies
All of these answers are correct.
. 1 points
Question 23
Question 23
________ is an operational factor that directly affects the economic viability of the organisation.
Answer

Customer focus
Supply chain
Continuous improvement
A key success factor
. 1 points
Question 24
Question 24
Management accounting information includes:
Answer
tabulated results of customer satisfaction surveys
the percentage of units produced that are defective
the cost of producing a product
All of these answers are correct.
. 1 points
Question 25
Question 25
Cost-volume-profit analysis is used PRIMARILY by management:
Answer
for control purposes
to prepare external financial statements
as a planning tool
to attain accurate financial results
. 1 points
Question 26
Question 26
In multiproduct situations, when sales mix shifts toward the product with the highest contribution
margin then:
Answer
breakeven quantity will increase
total revenues will decrease
total contribution margin will decrease
operating income will increase
. 1 points
Question 27
Question 27
Answer the following questions using the information below:
Northenscold Company sells several products. Information of average revenue and costs is as
follows:
Selling price per unit $20.00
Variable costs per unit:
Direct material $4.00
Direct manufacturing labor $1.60
Manufacturing overhead $0.40
Selling costs $2.00
Annual fixed costs $96,000

The number of units that Northenscold's must sell each year to break even is:
Answer
8,000 units
12,000 units
16,000 units
indeterminable
. 1 points
Question 28
Question 28
If unit outputs exceed the breakeven point:
Answer
there is a loss
there is a profit
total sales revenue exceeds total costs
Both total sales revenue exceeds total costs and there is a profit.
. 1 points
Question 29
Question 29
Answer the following questions using the information below:
Ruben intends to sell his customers a special round-trip airline ticket package. He is able to
purchase the package from the airline carrier for $150 each. The round-trip tickets will be sold for
$200 each and the airline intends to reimburse Ruben for any unsold ticket packages. Fixed costs
include $5,000 in advertising costs.
What is the contribution margin per ticket package?
Answer
$50
$100
$150
$200
. 1 points
Question 30
Question 30
If breakeven point is 100 units, each unit sells for $30, and fixed costs are $1,000, then on a
graph the:
Answer
total cost line will be zero at zero units sold
total revenue line and the total cost line will intersect at $3,000 of revenue
revenue line will start at $1,000
All of these answers are correct.
. 1 points
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