ACG 2071 Bonus Tiny Test – Ch. 3-6 – Version A SOLUTION
1, (6 pts.) Watkins, Inc. has collected the following information over the last six months.
Month
Units Produced
Total costs
March
10,000
$24,500
April
12,000
26,200
May
16,000
26,300
June
11,000
24,100
July
15,000
26,500
Show all calculations to determine the estimated total cost in a month when 12,400 units are produced using the highlow method. Circle the estimated total cost.
High and low activity levels = March and May
VC per unit = ($26,300 - $24,500) / (16,000 – 10,000) = ) = $0.30 per unit
26,300 = (0.30)(16,000) + TFC
TFC = $21,500
TC = 0.30x + 21,500
TC = (0.30)(12,400) + 21,500 = $25,220
2.
(2 pts.) A regression analysis yields the following information:
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
ANOVA
Regression
Residual
Total
0.961386
0.924262
0.916688
39.10106
12
df
SS
1
10
11
Coefficients
186578
15288.9
201867
Standard
Error
MS
F
186578
1528.89
122.0345
t Stat
P-value
Sign F
6.3E-07
Lower
95%
Upper
95%
Lower
95.0%
Intercept
784.592
225.526
4.2349
0.00173
452.579 1457.6
452.58
X Variable 1
3.654
0.09912 11.0469
0.00634
0.87409 1.3158
0.8741
Show the calculation of the estimated cost for a production level of 920 units. Circle the amount.
Upper
95.0%
1457.6
1.3158
TC = 784.592 + (3.654*920) = $3,361.68 = $3.362
Answer Boxes
3. Within the normal operating range, variable costs
A. are a different amount per unit at different activity levels.
B. are the same amount per unit at any activity level.
C. are the same total amount at different activity levels.
D. vary inversely as activity changes.
B
4. Which of the following is not a method that is used to estimate variable and fixed costs?
A. Absorption costing
C. Scatter graph method
B. High low method
D. Regression analysis
A
ACG 2071 Bonus Tiny Test – Ch. 3-6 – Version B SOLUTION
1, (6 pts.) Watkins, Inc. has collected the following information over the last six months.
Month
Units Produced
Total costs
March
9,000
$15,400
April
11,000
16,200
May
10,000
15,100
June
15,000
16,300
July
14,000
16,500
Show all calculations to determine the estimated total cost in a month when 13,100 units are produced using the highlow method. Circle the estimated total cost.
High and low activity levels = March and June
VC per unit = ($16,300 - $15,400) / (15,000 – 9,000) = $0.15 per unit
16,300 = (0.15)(15,000) + TFC
TFC = $14,050
TC = 0.15x + 14,050
TC = (0.15)(13,100) + 14,050 = $16,015
3.
(2 pts.) A regression analysis yields the following information:
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
ANOVA
Regression
Residual
Total
0.961386
0.924262
0.916688
39.10106
12
df
SS
1
10
11
Coefficients
186578
15288.9
201867
Standard
Error
MS
F
186578
1528.89
122.0345
t Stat
P-value
Sign F
6.3E-07
Lower
95%
Upper
95%
Lower
95.0%
Intercept
784.592
225.526
4.2349
0.00173
452.579 1457.6
452.58
X Variable 1
3.654
0.09912 11.0469
0.00634
0.87409 1.3158
0.8741
Show the calculation of the estimated cost for a production level of 960 units. Circle the amount.
Upper
95.0%
1457.6
1.3158
TC = 784.592 + (3.654*960) = $4,292.43 = $4.292
Answer Boxes
3. Within the normal operating range, variable costs
A. are the same amount per unit at any activity level.
B. are the same total amount at different activity levels.
C. vary inversely as activity changes.
D. are a different amount per unit at different activity levels.
A
4. Which of the following is not a method that is used to estimate variable and fixed costs?
A. Regression analysis
C. Scatter graph method
B. High low method
D. Absorption costing
D