Reference no: EM132575054

Question 1. What is a fixed cost? Provide two examples.

Question 2. What is the difference between a committed fixed cost and a discretionary fixed cost? Provide examples of each.

Question 3. What is a variable cost? Provide two examples.

Question 4. What is a mixed cost? Provide two examples.

Question 5. Describe the variables in the cost equation Y = f + vX.

Question 6. How is the cost equation Y = f + vX used to estimate future costs?

Question 7. Why is it important to identify how costs behave with changes in activity?

Question 8. Review Why was the school district's administration surprised to find out that cost savings from closing a school would be much lower than initially anticipated?

Question 9. Explain how account analysis is used to estimate costs.

Question 10. Describe the four steps of the high-low method and how these steps are used to estimate costs.

Question 11. Why might the high-low method lead to inaccurate results?

Question 12. Describe the five steps of the scatter-graph method and how these steps are used to estimate costs.

Question 13. How can the scatter-graph method be used to identify unusual data points?

Question 14. Describe how regression analysis is used to estimate costs.

Question 15. How does the contribution margin income statement differ from the traditional income statement?

Question 16. Review Which costs at Lowe's are likely to be variable costs?

Question 17. Describe the term relevant range. Why is it important to stay within the relevant range when estimating costs?

Question 18. Explain how some costs can behave in a nonlinear way.

Question 19. Planning at Bikes Unlimited. Refer to the dialogue at Bikes Unlimited presented at the beginning of the chapter. What is the first step to be taken by Susan and her accounting staff to help in estimating profit for August?

Question 20. Identifying Cost Behavior. Vasquez Incorporated is trying to identify the cost behavior of the three costs that follow. Cost information is provided for three months. Cost A Cost B Cost C Month Units Produced Total Costs Cost per Unit Total Costs Cost per Unit Total Costs Cost per Unit