INS: DIF: Moderate OBJ: 3-4

28. The slope of a regression line is determined by dividing the change in activity level by the change in
Otal cost.

ANS: DIF: Moderate OBJ: 3-4

9. The slope of a regression line is detemned by dividing the change in total cost by the change in
activty le

ANS: T DIF: Moderate 3-4

OBJ
30. The high-low method excludes ouliers from the ealeulaticn of the slope of a regression line.

ANS: F DIF: Moderate OBJ: 34

31. When usmg the high- low mehod, fixed costs ure compued before the variable componcnt is

computed.
ANS: DIF: Moderate OBJ: 34

S2. When using the high-low method, the variable conponent is computed befre the fixed component is

ANS: DIF: Moderate OBJ: 3-4

35.Aexible budget is a planning dbeument that presents expected variable and fixed overhead coss at
ditlerent activaty levels

ANS: T DIF: Easy OBJ: 3-5

34. Amaster budget is a plhnning document that presents expected variable and fixed overhead costs at
dillerent activity levels.

ANS: IF: Easy OBJ: 3-5

5. Plantwide overhead raes provide a more accurate computntion ot tactory overhead than departmental
overhcad rates

ANS: F IF: Easy OBJ: 3-5

36. Plantwide overfhead raks provide a less accurate conputation at factory overhead than departmental
Ovcrnead rales

ANS: T DIF: Easy OBJ: 3-S

37, Absorption costing conforms with generally accepted accourting principles.

ANS: T IF: Moderate OBJ: 3-5

38. Direct costing conforms with genemlly accpied accouning prineipes.

$2
 ANS: F DIF: Moderate OBJ: 3-5

39. The Internal Revenue Service alows the use of both variable and absoption costing.

ANS: DIF: Moderate OBJ: 3-6

40. Sales mmus cost of goods sold is referred to as variable conibution margin.

ANS: F DIF: Moderate OBJ: 3-6

41. Phantom profis resuk when absorption costing is used and sales exceed production.

ANS: F DIF: Moderate OBJ: 3-6

42. Phantom profits result when absorpkion costing is used and production exceeds saks.

ANS: T DIF: Moderate OBJ: 3-6

43, If production exceeds sales, absarption casting net income exceeds varable costing net income

ANS: DIF: Moderate OBJ: 3-7

44. f production exceeds sales, absorption costing net income is less than vanable costing net income.

ANS: F DIF: Moderate OB: 3-7

45. If sales aceed production, absorption costing net income is ess than variable cosing net income.

ANS: 1 DIF: Moderate OBJ: 3-7

46. If sales exceed production, absorption costing net income exceeds vanable costing net income.

ANS: F DIF: Moderate OBJ: 3-7

COMPLETION

co8 system, factory overhead is assigned directly to products and services.

I. Ina(n)
ANS: acdual

DIF: Easy OBJ: