Deck 3: Cost Behaviour

Question 1

What is the relationship between per-unit fixed costs and output?

A) Per-unit fixed costs stay the same as output changes.
B) Per-unit fixed costs decrease as output increases.
C) Per-unit fixed costs decrease as output decreases.
D) Per-unit fixed costs increase as output increases.

Answer 1

B

Question 2

What is an example of a discretionary cost?

A) executive travel costs
B) the cost of leasing machinery
C) licence fees for fleet of vehicles
D) depreciation on a factory building

Answer 2

A

Question 3

Which of the following is characteristic of discretionary fixed costs?

A) They cannot be easily changed.
B) They often involve a long-term contract.
C) They can be easily changed by management.
D) They increase as output increases.

Answer 3

C

Question 4

What is a variable cost for a medical lab?

A) advertising on local radio station
B) leasing lab equipment
C) needles used to draw blood
D) salary of receptionist

Question 5

What is an example of a discretionary fixed cost?

A) insurance
B) advertising
C) factory rent
D) direct materials

Question 6

Which of the following is an example of a fixed cost?

A) direct materials
B) commissions
C) electricity
D) insurance

Question 7

What is characteristic of a fixed cost within the relevant range?

A) It increases in total as output increases.
B) It does not change in total as output changes.
C) It decreases in total as output decreases.
D) It has both a variable and a fixed component.

Question 8

What is relevant range?

A) the normal range of inputs
B) the range of output where cost relationships are valid
C) the range that does not change from period to period
D) the costs that do not change

Question 9

What is characteristic of a committed fixed cost?

A) It can be easily changed.
B) It often involves a long-term contract.
C) It changes when output changes.
D) It includes direct materials.

Question 10

What is a discretionary fixed cost for a doctor's office?

A) the salary of receptionist
B) the cost of newspaper advertising
C) the depreciation on furniture and equipment
D) the cost of forms

Question 11

When the level of activity increases within the relevant range,what is the effect on the fixed cost per unit?

A) It decreases.
B) It increases at first then decreases.
C) It remains the same.
D) It increases.

Question 12

Which factor causes or leads to a change in a cost or activity?

A) cost formula
B) regression line
C) driver
D) y-intercept

Question 13

If output increases by 60% and is still within the relevant range,what will be the most likely result?

A) Total fixed costs will increase by 60%.
B) Per-unit fixed cost will remain the same.
C) Total variable costs will increase by 60%.
D) Net income will increase by 60%.

Question 14

What is characteristic of variable costs within the relevant range?

A) stay constant on a per unit basis as output changes
B) decrease in total as output increases
C) decrease in per unit as output increases
D) stay constant in total as output increases

Question 15

What is a variable cost in a factory?

A) factory supervisor's salary
B) lubricant for machinery
C) factory building rent
D) product advertising costs

Question 16

What does cost behaviour analysis focus on?

A) the reaction of costs to changes in profit
B) the reaction of costs to change over time
C) the reaction of costs to changes in activity level.
D) the reaction of costs to changes in benefit

Question 17

Which of the following is likely a fixed cost in a fast-food restaurant?

A) cost of flour for pizza crust
B) cost of pepperoni for pizza topping
C) shift manager's salary
D) monthly electric bill

Question 18

What is a committed fixed cost for a coffee shop?

A) property taxes
B) coffee cups
C) coffee beans
D) barista wages

Question 19

Which of the following processes requires one to know how costs change as output changes?

A) Analyzing,reporting,and decision making
B) examining and interpreting
C) planning,controlling,and decision making
D) recalling and summarizing

Question 20

What is the range of activity within which a cost function is valid?

A) the relevant range
B) the normal range
C) the activity range
D) the discretionary range

Question 21

What will be the result if production volume increases from 4,000 to 5,000 units?

A) Total costs will increase by 20%.
B) Total costs will increase by 25%.
C) Total variable costs will increase by 25%.
D) Mixed and variable costs will increase by 25%.

Question 22

Suppose a cost's step-cost behaviour follows very narrow steps.What assumptions can be used to approximate the costs?

A) variable cost assumptions
B) fixed cost assumptions
C) step-fixed cost assumptions
D) mixed cost assumptions

Question 23

Refer to the Figure.Which element is the independent variable?

A) fixed cost
B) total cost
C) output
D) variable rate

Question 24

What is characteristic of step costs?

A) remain the same within the relevant range
B) have an increased fixed component at specified intervals
C) increase in direct proportion to increases in output
D) decrease in direct proportion to increases in output

Question 25

What is a characteristic of a mixed cost?

A) contains both a fixed and variable component
B) will increase as output decreases
C) will decrease as output increases
D) contains only variable costs

Question 26

Refer to the Figure.Which element is the slope?

A) variable rate
B) output
C) fixed cost
D) total cost

Question 27

Lindsay Company had utilities cost of $105,000 at an output level of 30,000 units.The utilities cost was a mixed cost,and the fixed portion was $60,000.What would be the best estimate of total utilities cost at an output level of 50,000 units?

A) $50,000
B) $110,000
C) $125,000
D) $135,000

Question 28

Which relationship is characteristic of per-unit variable costs?

A) increase as output decreases
B) increase as output increases
C) decrease as output decreases
D) remain constant within the relevant range

Question 29

Refer to the Figure.Which element is the intercept?

A) fixed cost
B) total cost
C) output
D) variable rate

Question 30

What is the formula to calculate a mixed cost?

A) total cost = variable rate × amount of output
B) total cost = total fixed cost + (variable rate × amount of output)
C) total cost = fixed rate × amount of output
D) total cost = total fixed cost - (variable rate × amount of output)

Question 31

What is a variable cost at an equestrian facility?

A) salary of the farm manager
B) cost of registration forms
C) salary of the horse trainer
D) rent on the buildings

Question 32

When a mixed cost is graphed,what does the slope of the line represent?

A) the fixed cost per unit of output
B) the total cost per unit
C) the sales price per unit
D) the variable cost per unit of the activity driver

Question 33

What is a feature of mixed costs?

A) They vary in direct proportion to changes in output.
B) They stay the same regardless of output.
C) They have the same cost behaviour as a step cost.
D) They decrease in total when output decreases.

Question 34

Refer to the Figure.Which element is the dependent variable?

A) variable rate
B) fixed cost
C) total cost
D) output

Question 35

Suppose the cost formula for monthly depreciation cost in a factory is as follows: Total cost = $20,000
Which type of cost does this formula represent?

A) a variable cost
B) a fixed cost
C) a mixed cost
D) a step cost

Question 36

If output increases,what is the result?

A) Per-unit fixed cost will decrease.
B) Total variable costs will decrease.
C) Total mixed costs will decrease.
D) Total mixed costs will stay the same.

Question 37

When a mixed cost is graphed,what does the Y-intercept correspond to?

A) the fixed cost
B) the variable rate
C) total fixed cost + total variable cost
D) the number of units sold

Question 38

What is the relationship between total variable costs and output?

A) Total variable costs stay the same as output changes.
B) Total variable costs increase as output decreases.
C) Total variable costs decrease as output increases.
D) Total variable costs equal variable rate × amount of output.

Question 39

What is a mixed cost?

A) rent on machinery
B) sugar at a bakery
C) repairs and maintenance on vehicle fleet
D) depreciation on production equipment

Question 40

If output decreases,what is the result?

A) Total fixed costs will remain the same.
B) Total variable costs will increase.
C) Total mixed costs will remain the same.
D) Total mixed costs will increase.

Question 41

$\begin{array}{lrr}& \text { Electricity } & \text { Machine } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { May } & \$ 7,560 & 570 \\\text { June } & 8,220 & 625 \\\text { July } & 7,480 & 546 \\\text { August } & 7,186 & 518\end{array}$ Coefficients shown by a regression program are: $\begin{array}{ll}\text { Intercept } & 2,225 \\\text { X Variable 1 } & 9.75\end{array}$

-Refer to the Figure.What is the variable rate of the electricity cost when using the results of regression?

A) $9.67 per machine hour
B) $9.75 per machine hour
C) $10.25 per machine hour
D) $13.87 per machine hour

Question 42

Crazy Toys, Inc.
Cost of Materials
$\begin{array}{lr}\text { No. of toys produced } & \text { Total cost of materials } \\100,000 & \$ 30,000 \\200,000 & \$ 60,000 \\300,000 & \$ 90,000\end{array}$

-Refer to the Figure.What is the total variable utility cost for the month of May?

A) $1,400
B) $5,440
C) $8,080
D) $9,480

Question 43

Suppose that at a given volume,total costs and fixed costs are known.How are the variable costs per unit computed?

A) (total costs − fixed costs) / unit volume
B) (total costs / unit volume)− fixed costs
C) (total costs × unit volume)− (fixed costs / unit volume)
D) total costs − (fixed costs / unit volume)

Question 44

$\begin{array}{lrr}& \text { Maintenance } & \text { Machine } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { March } & \$ 4,180 & 328 \\\text { April } & 3,956 & 310 \\\text { May } & 4,686 & 386 \\\text { June } & 4,240 & 352\end{array}$ Coefficients shown by a regression program are as follows: $$\begin{array} { l l } \text { Intercept } & 985 \\\text { X Variable 1 } & 9.82\end{array}$$

-Refer to the Figure.What is the cost formula for maintenance cost when using the result of regression?

A) $985 × machine hours
B) ($4,686 ? $3,956) / (386 ? 310)
C) $9.82 × machine hours
D) $985 + ($9.82 × machine hours)

Question 45

$\begin{array}{lrr}\text { Type of Cost } &\text { March }&\text { April } \\\text { Insurance } & \$ 5,000 & \$ 5,000 \\\text { Utilities } & 4,000 & 5,000 \\\text { Depreciation } & 3,500 & 3,500 \\\text { Materials } & 10,000 & 20,000\end{array}$

-Refer to the Figure.Assume that output was 5,000 units in March and 10,000 units in April,utility cost is a mixed cost,and the fixed cost of utilities was $3,000.What was the variable rate per unit of output for utilities cost?

A) $0.20
B) $0.30
C) $0.40
D) $0.60

Question 46

$\begin{array}{lrr}\text { Type of Cost } &\text { March }&\text { April } \\\text { Insurance } & \$ 5,000 & \$ 5,000 \\\text { Utilities } & 4,000 & 5,000 \\\text { Depreciation } & 3,500 & 3,500 \\\text { Materials } & 10,000 & 20,000\end{array}$

-Refer to the Figure.Which of the following can be assumed from the information above?

A) Insurance and depreciation are fixed costs.
B) Output decreased from March to April.
C) Output stayed the same from March to April.
D) Insurance is a mixed cost.

Question 47

$\begin{array}{lrr}& \text { Maintenance } & \text { Machine } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { March } & \$ 4,180 & 328 \\\text { April } & 3,956 & 310 \\\text { May } & 4,686 & 386 \\\text { June } & 4,240 & 352\end{array}$ Coefficients shown by a regression program are as follows: $$\begin{array} { l l } \text { Intercept } & 985 \\\text { X Variable 1 } & 9.82\end{array}$$

-Refer to the Figure.Assume that 400 machine hours are budgeted.What would be the budgeted cost for maintenance next month?

A) $985
B) $2,943
C) $3,928
D) $4,913

Question 48

$\begin{array}{lrr}& \text { Maintenance } & \text { Machine } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { March } & \$ 4,180 & 328 \\\text { April } & 3,956 & 310 \\\text { May } & 4,686 & 386 \\\text { June } & 4,240 & 352\end{array}$ Coefficients shown by a regression program are as follows: $$\begin{array} { l l } \text { Intercept } & 985 \\\text { X Variable 1 } & 9.82\end{array}$$

-Refer to the Figure.What is the variable rate of maintenance cost when using the results of regression?

A) $9.82 per machine hour
B) $9.85 per machine hour
C) $12.14 per machine hour
D) $12.74 per machine hour

Question 49

$\begin{array}{lrr}& \text { Electricity } & \text { Machine } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { May } & \$ 7,560 & 570 \\\text { June } & 8,220 & 625 \\\text { July } & 7,480 & 546 \\\text { August } & 7,186 & 518\end{array}$ Coefficients shown by a regression program are: $\begin{array}{ll}\text { Intercept } & 2,225 \\\text { X Variable 1 } & 9.75\end{array}$

-Refer to the Figure.What is the fixed cost of electricity when using the results of regression?

A) $2,180
B) $2,200
C) $2,225
D) $2,250

Question 50

Crazy Toys, Inc.
Cost of Materials
$\begin{array}{lr}\text { No. of toys produced } & \text { Total cost of materials } \\100,000 & \$ 30,000 \\200,000 & \$ 60,000 \\300,000 & \$ 90,000\end{array}$

-Refer to the Figure.What is the cost behaviour of the materials cost?

A) fixed
B) mixed
C) step
D) variable

Question 51

$\begin{array}{lrr}\text { Type of Cost } &\text { March }&\text { April } \\\text { Insurance } & \$ 5,000 & \$ 5,000 \\\text { Utilities } & 4,000 & 5,000 \\\text { Depreciation } & 3,500 & 3,500 \\\text { Materials } & 10,000 & 20,000\end{array}$

-Refer to the Figure.If output was 5,000 units in March and 10,000 units in April,which of the following can be assumed?

A) Utilities and materials are variable costs.
B) Utilities,insurance,and depreciation are fixed costs.
C) Insurance and depreciation are mixed costs.
D) Materials are the only variable cost.

Question 52

Which of the following is a characteristic of the high-low method?

A) It is the most accurate method.
B) It cannot be affected by the presence of outliers.
C) It has the disadvantage of objectivity.
D) It is mathematically easy to calculate.

Question 53

Crazy Toys, Inc.
Cost of Materials
$\begin{array}{lr}\text { No. of toys produced } & \text { Total cost of materials } \\100,000 & \$ 30,000 \\200,000 & \$ 60,000 \\300,000 & \$ 90,000\end{array}$

-Refer to the Figure.What is the total materials cost at a production level of 220,000 toys?

A) $22,000
B) $66,000
C) $88,000
D) $132,000

Question 54

Whistler Company makes downhill skis.The company controller wants to calculate the fixed and variable costs associated with janitorial services incurred by the factory.Data for the past six months were collected. $\begin{array}{lrr}\text { Month } & \text { Janitorial } & \text { labor } \\ & \underline{\text { cost }} & \underline{\text { hours }}\\\text { July } & \$ 9,200 & 10,120 \\\text { August } & 8,800 & 9,500 \\\text { September } & 9,350 & 10,500 \\\text { October } & 9,620 & 11,100 \\\text { November } & 8,400 & 8,660 \\\text { December } & 9,400 & 10,650\end{array}$ Which of the following is the set of high and low months? High Low

A) December October
B) December November
C) July August
D) October November

Question 55

$\begin{array}{lrr}& \text { Electricity } & \text { Machine } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { May } & \$ 7,560 & 570 \\\text { June } & 8,220 & 625 \\\text { July } & 7,480 & 546 \\\text { August } & 7,186 & 518\end{array}$ Coefficients shown by a regression program are: $\begin{array}{ll}\text { Intercept } & 2,225 \\\text { X Variable 1 } & 9.75\end{array}$

-Refer to the Figure.Assume that 640 machine hours are budgeted.What would be the total budgeted cost for electricity next month?

A) $2,225
B) $4,015
C) $6,240
D) $8,465

Question 56

What is the formula to calculate the variable rate of a mixed cost when using the high-low method?

A) total cost at high point ? (variable rate × output at high point)
B) total cost at high point ? (variable rate × output at low point)
C)
$\frac{\text { high point output - low point output }}{\text { high point cost - low point cost }}$
D)
$\frac{\text { high point cost - low point cost}}{\text {high point output - low point output }}$

Question 57

Crazy Toys, Inc.
Cost of Materials
$\begin{array}{lr}\text { No. of toys produced } & \text { Total cost of materials } \\100,000 & \$ 30,000 \\200,000 & \$ 60,000 \\300,000 & \$ 90,000\end{array}$

-Refer to the Figure.If Lethbridge Company incurs 9,600 labour hours for the year,what would be the estimate of total utility cost?

A) $96,960
B) $98,360
C) $113,760
D) $120,960

Question 58

$\begin{array}{lrr}& \text { Maintenance } & \text { Machine } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { March } & \$ 4,180 & 328 \\\text { April } & 3,956 & 310 \\\text { May } & 4,686 & 386 \\\text { June } & 4,240 & 352\end{array}$ Coefficients shown by a regression program are as follows: $$\begin{array} { l l } \text { Intercept } & 985 \\\text { X Variable 1 } & 9.82\end{array}$$

-Refer to the Figure.What is the fixed cost of maintenance when using the result of regression?

A) $985.00
B) $978.37
C) $982.00
D) $988.00

Question 59

Crazy Toys, Inc.
Cost of Materials
$\begin{array}{lr}\text { No. of toys produced } & \text { Total cost of materials } \\100,000 & \$ 30,000 \\200,000 & \$ 60,000 \\300,000 & \$ 90,000\end{array}$

-Refer to the Figure.What is the materials cost per unit of output?

A) $0.10
B) $0.30
C) $0.40
D) $0.60

Question 60

Crazy Toys, Inc.
Cost of Materials
$\begin{array}{lr}\text { No. of toys produced } & \text { Total cost of materials } \\100,000 & \$ 30,000 \\200,000 & \$ 60,000 \\300,000 & \$ 90,000\end{array}$

-Refer to the Figure.What is the total utility cost for the month of May?

A) $1,400
B) $5,440
C) $8,080
D) $9,480

Question 61

The following cost formula was developed using the monthly data for Nova Scotia Accounting Firm.Total cost = $87,100 + ($210 × number of tax returns)
Refer to the Figure.What does "number of tax returns" represent?

A) the independent variable
B) the dependant variable
C) the intercept
D) the variable rate

Question 62

The following cost formula was developed using monthly data for Montreal Clothing Store.Total cost = $75,620 + ($242 × number of customers)
Refer to the Figure.What does "number of customers" represent?

A) the independent variable
B) the dependant variable
C) the intercept
D) the variable rate

Question 63

$\begin{array}{lrr}& \text { Utility } & \text { Labour } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { May } & \$ 22,100 & 3,975 \\\text { June } & 24,600 & 5,430 \\\text { July } & 23,500 & 4,400 \\\text { August } & 20,140 & 3,200\end{array}$

-Refer to the Figure.What is the fixed cost of electricity when using the high-low method?

A) $6,400
B) $10,860
C) $13,740
D) $24,000

Question 64

$\begin{array}{lrr}&& \text { Machine } \\\text { Month } & \text { Lease cost }&\text { hours }\\\text { April } & \$ 21,000 & 550 \\\text { May } & 16,500 & 420 \\\text { June } & 19,000 & 510 \\\text { July } & 22,230 & 570\end{array}$

-Refer to the Figure.What would be Banff Company's cost formula to estimate the cost of leasing within the relevant range?

A) total lease cost = $456 + ($38.20 × machine hours)
B) total lease cost = $516 + ($38.18 × machine hours)
C) total lease cost = $420 + ($37.25 × machine hours)
D) total lease cost=$482+($61.50× machine hours)

Question 65

$\begin{array}{lrr}& \text { Utility } & \text { Labour } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { May } & \$ 22,100 & 3,975 \\\text { June } & 24,600 & 5,430 \\\text { July } & 23,500 & 4,400 \\\text { August } & 20,140 & 3,200\end{array}$

-Refer to the Figure.What would be the estimate of electricity cost if the factory incurred 4,700 labour hours next month?

A) $9,400
B) $19,560
C) $20,260
D) $23,140

Question 66

The following cost formula was developed using the monthly data for Nova Scotia Accounting Firm.Total cost = $87,100 + ($210 × number of tax returns)
Refer to Nova Scotia Accounting Firm's cost formula.What does $87,100 represent?

A) the independent variable
B) the dependant variable
C) the intercept
D) the variable rate

Question 67

The following cost formula was developed using the monthly data for Nova Scotia Accounting Firm.Total cost = $87,100 + ($210 × number of tax returns)
Refer to the Figure.What does "total cost" represent?

A) the independent variable
B) the dependant variable
C) the intercept
D) the variable rate

Question 68

$\begin{array}{lrr}\text { Month } & \text { Electricity } & \text { Machine } \\ & \underline{\text { cost }} & \underline{\text { hours }}\\\hline\text { June } & \$ 25,160 & 4,500 \\\text { July } & 26,170 & 4,810 \\\text { August } & 27,250 & 5,120 \\\text { September } & 26,680 & 5,010 \\\text { October } & 27,950 & 5,430 \\\text { November } & 27,500 & 5,190\end{array}$

-Refer to the Figure.Which of the following is the set of high and low months? High Low

A) June July
B) June October
C) October September
D) October June

Question 69

The following cost formula was developed using monthly data for Montreal Clothing Store.Total cost = $75,620 + ($242 × number of customers)
Refer to the Figure.What does $75,620 represent?

A) the independent variable
B) the dependant variable
C) the intercept
D) the variable rate

Question 70

$\begin{array}{lrr}&& \text { Machine } \\\text { Month } & \text { Lease cost }&\text { hours }\\\text { April } & \$ 21,000 & 550 \\\text { May } & 16,500 & 420 \\\text { June } & 19,000 & 510 \\\text { July } & 22,230 & 570\end{array}$

-Refer to the Figure.Which of the following is the variable rate for the lease cost when using the high-low method?

A) $37.25
B) $38.18
C) $38.20
D) $61.50

Question 71

$\begin{array}{lrr}\text { Month } & \text { Janitorial } & \text { Machine } \\ & \underline{\text { cost }} & \underline{\text { hours }}\\\text { September } & \$ 11,000 & 575 \\\text { October } & 11,400 & 610 \\\text { November } & 10,200 & 510 \\\text { December } & 10,725 & 550\end{array}$

-Refer to the Figure.What would be the fixed cost of the janitorial services when using the high-low method?

A) $4,080
B) $7,320
C) $6,120
D) $11,000

Question 72

$\begin{array}{lrr}& \text { Utility } & \text { Labour } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { May } & \$ 22,100 & 3,975 \\\text { June } & 24,600 & 5,430 \\\text { July } & 23,500 & 4,400 \\\text { August } & 20,140 & 3,200\end{array}$

-Refer to the Figure.Which of the following is the set of high and low months? High Low

A) June August
B) June July
C) May July
D) May August

Question 73

$\begin{array}{lrr}&& \text { Machine } \\\text { Month } & \text { Lease cost }&\text { hours }\\\text { April } & \$ 21,000 & 550 \\\text { May } & 16,500 & 420 \\\text { June } & 19,000 & 510 \\\text { July } & 22,230 & 570\end{array}$

-Refer to the Figure.What would be the estimate of Banff Company's total lease cost at a level of 500 machine hours?

A) $16,464
B) $18,546
C) $19,556
D) $19,606

Question 74

The following cost formula was developed using monthly data for Montreal Clothing Store.Total cost = $75,620 + ($242 × number of customers)
Refer to the Figure.What does "total cost" represent?

A) the independent variable
B) the dependant variable
C) the intercept
D) the variable rate

Question 75

$\begin{array}{lrr}& \text { Electricity } & \text { Machine } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { May } & \$ 7,560 & 570 \\\text { June } & 8,220 & 625 \\\text { July } & 7,480 & 546 \\\text { August } & 7,186 & 518\end{array}$ Coefficients shown by a regression program are: $\begin{array}{ll}\text { Intercept } & 2,225 \\\text { X Variable 1 } & 9.75\end{array}$

-Refer to the Figure.What is the cost formula for electricity cost when using the results of regression?

A) $9.75 × machine hours
B) $2,225 × machine hours
C) $2,225 + ($9.75 × machine hours)
D) $9.75+($2,225 × machine hours)

Question 76

The following cost formula was developed using monthly data for Montreal Clothing Store.Total cost = $75,620 + ($242 × number of customers)
Refer to the Figure.What does $242 represent?

A) the independent variable
B) the dependant variable
C) the intercept
D) the variable rate

Question 77

The following cost formula was developed using the monthly data for Nova Scotia Accounting Firm.Total cost = $87,100 + ($210 × number of tax returns)
Refer to the Figure.What does $210 represent?

A) the independent variable
B) the dependant variable
C) the intercept
D) the variable rate

Question 78

$\begin{array}{lrr}&& \text { Machine } \\\text { Month } & \text { Lease cost }&\text { hours }\\\text { April } & \$ 21,000 & 550 \\\text { May } & 16,500 & 420 \\\text { June } & 19,000 & 510 \\\text { July } & 22,230 & 570\end{array}$

-Refer to the Figure.Which of the following is the fixed cost of leasing when using the high-low method?

A) $420
B) $456
C) $482
D) $516

Question 79

$\begin{array}{lrr}& \text { Utility } & \text { Labour } \\\text { Month } & \underline{\text { cost }} & \underline{\text { hours }}\\\text { May } & \$ 22,100 & 3,975 \\\text { June } & 24,600 & 5,430 \\\text { July } & 23,500 & 4,400 \\\text { August } & 20,140 & 3,200\end{array}$

-Refer to the Figure.What is the variable rate for the utility cost when using the high-low method?

A) $1.02
B) $1.07
C) $2.00
D) $2.80

Question 80

$\begin{array}{lrr}\text { Month } & \text { Janitorial } & \text { Machine } \\ & \underline{\text { cost }} & \underline{\text { hours }}\\\text { September } & \$ 11,000 & 575 \\\text { October } & 11,400 & 610 \\\text { November } & 10,200 & 510 \\\text { December } & 10,725 & 550\end{array}$

-Refer to the Figure.What would be Lake Louise Company's estimate of total janitorial cost at a level of 625 machine hours?

A) $4,080
B) $6,120
C) $7,500
D) $11,580