Reference no: EM132602849

Question 1: The collection of information on costs and their drivers, gathered through observations and interviews, from departments within an organization is known as

a. the quantitative analysis method.

b. the account analysis method.

c. the conference method.

d. the industrial-engineering method.

Question 2: To discourage excessive use of a support department, management might

a. Not allocate any costs of the support department

b. Allocate costs based on user department usage

c. Allocate a fixed amount to each department regardless of use

d. Expense fixed costs of support departments directly to the income statement

Question 3: Pam's Stables used two different predictor variables (trainer hours and number of horses) in two different equations to evaluate the cost of training horses. The most recent results of the two regressions are as follows:

Trainer's hours:

Variable               Coefficient             Standard              Error t-Value

Constant                913.32                   2.093            4.44

Predictor Variable      20.90                      2.844             3.50

r2 = 0.56

Number of horses:

Variable                  Coefficient              Standard                Error t-Value

Constant                    4764.5                  0.812                        4.61

Predictor Variable

864.98

0.294

3.40

r2 = 0.83

What is the estimated total cost for the coming year if 16,000 trainer hours are incurred and the stable has 400 horses to be trained, based on the best cost driver?

a. $ 81,273.32

b. $314,413.32

c. $335,313.32

d. $350,756.50