11) The total cost at an operating level of 2,850 hours would be

A) $19,210.

B) $11,763.

C) $14,697.

D) $11,212.

E) $9,210.

Use the information below to answer the following question(s).

 

The Monroe Company uses the high-low method to estimate the cost function. The information for 2002 is provided below.

 

 

Machine

Hours

Labour

Costs

Highest observation of cost driver

240

$4,000

Lowest observation of cost driver

110

2,960

 

12) What is Monroe Company’s slope coefficient per machine hour?

A) $26.91

B) $18.00

C) $16.67

D) $10.00

E) $8.00

 

13) What is the constant for the estimating cost equation?

A) $2,080

B) $2,960

C) $3,970

D) $4,000

E) $8,000

 

14) What is the estimate of Monroe’s cost function when 200 machine hours are used?

A) $1,840.00

B) $1,997.50

C) $2,280.00

D) $3,333.33

E) $3,680.00

Use the information below to answer the following question(s).

 

At the high point of the relevant range, labour hours at Bradco Restoration were 10,000 and wages were $22,500. At the low point of the relevant range, labour hours were 7,500 and wages were $17,500.

 

15) Using the high-low method determine the slope coefficient per labour hour at Bradco Restoration?

A) $5.25

B) $4.00

C) $2.00

D) $0.50

E) $0.25

 

16) Using the high-low method determine the constant at Bradco Restoration?

A) $17,500

B) $13,750

C) $2,500

D) $1,250

E) $750

 

17) What is the high-low estimate of the labour costs at Bradco Restoration when 8,000 hours are used?

A) $21,500

B) $18,500

C) $17,750

D) $17,250

E) $17,125

18) When using the high-low method, the denominator in the equation that determines the slope is the

A) outcome variable.

B) predictor variable.

C) difference between the high and low observations of the cost driver.

D) difference between the high and low observations of the outcome variables.

E) the intercept.

 

19) When using the high-low method, the two observations used are the high and low observations of the

A) cost driver.

B) outcome variables.

C) outliers.

D) mixed costs.

E) total pool cost.

 

Answer the following question(s) using the information below.

 

The Taranto Company uses the high-low method to estimate it’s cost function. The information for 2012 is provided below:

 

 

Machine-hours

Costs

Highest observation of cost driver

2,000

$225,000

Lowest observation of cost driver

1,000

$125,000

 

20) What is the slope coefficient per machine-hour?

A) $125.00

B) $12.50

C) $10.00

D) $100.00

E) $0.50

 

 



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