ACCT 207 EXAM 2 ACCURATE STUDY GUIDE
4 types of cost behavior - Answers - 1) Variable
2) Fixed
3) Step-Variable
4) Mixed
cost behavior - Answers - how a cost reacts to changes in the level of activity
Variable Cost Behavior - Answers - Total variable cost increases in direct proportion to
the number of units sold
Fixed Cost Behavior - Answers - When activity increases:
Total fixed cost remains constant
Fixed cost per unit decreases
When activity decreases:
Total fixed cost remains constant
Fixed cost per unit increases
Mixed Cost Behavior - Answers - hybrid cost with a fixed and variable cost component
Step Cost Behavior - Answers - - A step cost function displays a constant level of cost
for a range of output and then jumps to a higher level of cost at some point
Define what each term means;
y=a+ bx - Answers - y=total cost
a=fixed cost
b=cost per unit
x=units of activity
why do we use scatterplots - Answers - to identify outliers
Limitation of high low method - Answers - ignores many observations
Define 'least-squares regression' method: - Answers - produces a best fit line by
minimizing the total sum of squares- uses all points
Model F statistic - Answers - Overall significance-
A statistic that compares the amount of variation in the dependent measure "explained"
or associated with the independent variables to the "unexplained" or error variance. A
larger F statistic indicates that the regression model has more explained variance than
error variance.
, R^2 - Answers - Coeffiecient of determination
the proportion (percent) of the variation in the values of y that can be accounted for by
the least squares regression line
standard error - Answers - degree of confidence
t statistic - Answers - whether the parameter estimate is significantly different that 0
Qualifications for r^2 - Answers - Bigger is better, compared to another
Qualification for Standard error - Answers - Smaller is better
Qualifications for F statistic - Answers - greater than 4, use it. P- value will be less than
.1 if thats the case
Qualification for p-value - Answers - Ignore a (intercept if p is GREATER than .1)
Qualifications for
f
t
p - Answers - f greater than 4
t greater than 2
p less than .1
Absorption Costing - Answers - Revenues
-COGS
=gross margin
-Period costs
=Net income (ACNI)
Variable Costing - Answers - Revenues
-total variable cost
=Contribution Margin
-Fixed cost
=net income VCNI
Contribution Margin - Answers - revenue - variable costs
Reconciling ACNI And VCNI - Answers - ACNI-VCNI= (Fixed MOH per unit) (Change in
Inventory)
If production is greater that sales - Answers - ACNI is greater that VCNI
if production is less than sales - Answers - ACNI is less than VCNI
4 types of cost behavior - Answers - 1) Variable
2) Fixed
3) Step-Variable
4) Mixed
cost behavior - Answers - how a cost reacts to changes in the level of activity
Variable Cost Behavior - Answers - Total variable cost increases in direct proportion to
the number of units sold
Fixed Cost Behavior - Answers - When activity increases:
Total fixed cost remains constant
Fixed cost per unit decreases
When activity decreases:
Total fixed cost remains constant
Fixed cost per unit increases
Mixed Cost Behavior - Answers - hybrid cost with a fixed and variable cost component
Step Cost Behavior - Answers - - A step cost function displays a constant level of cost
for a range of output and then jumps to a higher level of cost at some point
Define what each term means;
y=a+ bx - Answers - y=total cost
a=fixed cost
b=cost per unit
x=units of activity
why do we use scatterplots - Answers - to identify outliers
Limitation of high low method - Answers - ignores many observations
Define 'least-squares regression' method: - Answers - produces a best fit line by
minimizing the total sum of squares- uses all points
Model F statistic - Answers - Overall significance-
A statistic that compares the amount of variation in the dependent measure "explained"
or associated with the independent variables to the "unexplained" or error variance. A
larger F statistic indicates that the regression model has more explained variance than
error variance.
, R^2 - Answers - Coeffiecient of determination
the proportion (percent) of the variation in the values of y that can be accounted for by
the least squares regression line
standard error - Answers - degree of confidence
t statistic - Answers - whether the parameter estimate is significantly different that 0
Qualifications for r^2 - Answers - Bigger is better, compared to another
Qualification for Standard error - Answers - Smaller is better
Qualifications for F statistic - Answers - greater than 4, use it. P- value will be less than
.1 if thats the case
Qualification for p-value - Answers - Ignore a (intercept if p is GREATER than .1)
Qualifications for
f
t
p - Answers - f greater than 4
t greater than 2
p less than .1
Absorption Costing - Answers - Revenues
-COGS
=gross margin
-Period costs
=Net income (ACNI)
Variable Costing - Answers - Revenues
-total variable cost
=Contribution Margin
-Fixed cost
=net income VCNI
Contribution Margin - Answers - revenue - variable costs
Reconciling ACNI And VCNI - Answers - ACNI-VCNI= (Fixed MOH per unit) (Change in
Inventory)
If production is greater that sales - Answers - ACNI is greater that VCNI
if production is less than sales - Answers - ACNI is less than VCNI
