BEC 4

Question 1

regression model

Answer 1

y = ax + B

Question 2

coefficient of correlation

Answer 2

“R”, measures the strength of linear relationship

Question 3

coefficient of determination

Answer 3

“R^2, measure the fit of the regression line

Question 4

high low method

Answer 4

(highest cost - lowest cost) / (highest quantity / lowest quantity) = cost per unit

then sub that cost into y = ax + B

Question 5

Absorption approach formula

Answer 5

revenue 
(COGS) 
gross margin 
(operating expenses) 
net income

Question 6

contribution approach formula

Answer 6

Revenue 
(VC) 
CM 
(Fixed Costs) 
Net income

Question 7

main difference between contribution approach and absorption approach

Answer 7

treating of fixed factory OH

absorption approach –> treats it as a product cost

contribution approach –> treats it as a period cost

Question 8

CM Ratio

Answer 8

CM / Revenue

Question 9

breakeven point in units

Answer 9

total fixed costs / CM per unit

Question 10

breakeven point in dollars

Answer 10

total fixed costs / CM ratio

Question 11

units needed to achieve profit

Answer 11

total FC + pretax profit / CM per unit

Question 12

to find sales in $ needed to achieve profit

Answer 12

total FC + pretax profit / CM ratio

Question 13

DM price variance

Answer 13

actual quantity purchases x (actual price - std. price)

Question 14

DM usage variance

Answer 14

std. price * (actual quantity used - std quantity used)

Question 15

DL rate variance

Answer 15

actual hours * (actual rate - std. rate)

Question 16

DL efficiency variance

Answer 16

std. rate * (actual hours - std. hours)

Question 17

VOH spending variance

Answer 17

actual hours * (actual rate - std. rate)

Question 18

VOH efficiency variance

Answer 18

std rate * (actual hrs. - std. hours)

Question 19

FOH spending variance

Answer 19

actual FOH - budgeted FOH

Question 20

FOH volume variance

Answer 20

budgeted FOH - (std. rate * actual production)

Question 21

sales price variance

Answer 21

actual units sold * ( actual SP per unit - std. SP per unit)

Question 22

sales volume variance

Answer 22

std. CM per unit * (actual units sold - budgeted units sold)