ACC 1110 Lecture Notes - Lecture 3: Scatter Plot, Linear Regression, Fixed Cost

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violetzebra193

11 Feb 2018

School

University of Manitoba

Department

Accounting

Course

ACC 1110

Professor

Jeanbih Pai

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Document Summary

This assumption allows the costs to be separated into variable or fixed cost category. A total variable cost will increase or decrease in proportion to the change in activity level. For example, when more pages of flyer are printed, the more paper will be used. However, the unit variable cost or cost per sheet of paper remains the same and does not vary as number of pages printed varies. A total fixed cost remains the same in total despite a change in activity level. For example, the storage rental remains the same regardless of how many items you placed in the storage unit. However, unit fixed cost will increase when activity level decreases. Based on the characteristics of aforementioned costs and the assumption of relevant range, most costs -- whether, mixed, variable, or fixed, can be estimated using this formula: Estimation methods: scatter graph or scattergram, high-low method, linear regression using excel.

Related Questions

This question has five parents:

1. Variable costs in total increase or decrease in proportionwith changes in the level of business activity:

a. true b. false

2. Variable cost per unit remains constant when the number ofunits produced changes:

a. true b. false

3. Fixed cost per unit remains the same even though there is achange in the number of units produced:

a. true b. false

4. Managerial accounting stresses accounting concepts andprocedures that are relevant to preparing reports for:

a. investors and banks

b. internal users of accounting information

c. shareholders and creditors

d. the Security and Exchange Commission (SEC)

5. Kilwinâs Candies produced and sold 600 boxes of chocolatecovered popcorn last month and had total variable costs of $2,100that reflected the cost of chocolate and popcorn (ingredients).Each box of popcorn for $12.00. If production and sales areexpected to increase by 10% next month, which of the followingstatements are true?

a. Total variable costs are expected to be $1,785.

b. Variable cost per unit is expected to be $3.50.

c. Unit variable costs are expected to be $2.10.

d. Total fixed costs will be $150,000.

magentalocust842

Match the items in the two columns below by entering theappropriate code letter in the space provided.

The amount of revenue remaining after deducting variablecosts.
Costs that contain both a variable and a fixed element.
The percentage of sales dollars available to cover fixed costsand produce income.
Identifies the activity which causes changes in the behavior ofcosts.
The difference between actual or expected sales and sales atthe break-even point.
Costs that vary in total directly and proportionately withchanges in the activity level.
The level of activity at which total revenues equal totalcosts.
The range over which the company expects to operate during theyear.
Costs that remain the same in total regardless of changes inthe activity level.
A costing approach in which all manufacturing costs are chargedto the product.
A method that uses the total costs incurred at the high and lowlevels of activity.
A costing approach in which only variable manufacturing costsare product costs and fixed manufacturing costs are period costs(expenses).

1.	Activity index
2.	Variable costs
3.	Fixed costs
4.	High-low method
5.	Relevant range
6.	Mixed costs
7.	Break-even point
8.	Contribution margin
9.	Variable costing
10.	Absorption costing

orangetermite875

Match the items in the two columns below by entering theappropriate code letter in the space provided.

The amount of revenue remaining after deducting variablecosts.
Costs that contain both a variable and a fixed element.
The percentage of sales dollars available to cover fixed costsand produce income.
Identifies the activity which causes changes in the behavior ofcosts.
The difference between actual or expected sales and sales atthe break-even point.
Costs that vary in total directly and proportionately withchanges in the activity level.
The level of activity at which total revenues equal totalcosts.
The range over which the company expects to operate during theyear.
Costs that remain the same in total regardless of changes inthe activity level.
A costing approach in which all manufacturing costs are chargedto the product.
A method that uses the total costs incurred at the high and lowlevels of activity.
A costing approach in which only variable manufacturing costsare product costs and fixed manufacturing costs are period costs(expenses).

1.	Activity index
2.	Variable costs
3.	Fixed costs
4.	High-low method
5.	Relevant range
6.	Mixed costs
7.	Break-even point
8.	Contribution margin
9.	Margin of safety
10.	Contribution margin ratio
11.	Variable costing
12.	Absorption costing

lavenderjackal968

ACC 1110 Lecture Notes - Lecture 3: Scatter Plot, Linear Regression, Fixed Cost

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