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60. Smith Company is attempting to develop the cost function for repair costs. The following past data are available: Machine Hours 4,800 3,400 4,000 5,900 Repair Costs $6,385 4,585 5,285 7,085 Using the high-low method, what is the variable repair cost per machine hour? a) $0.15 b) $1.00 c) $4.00 d) $5.00 Answer: b Difficulty: Easy Learning Objective: Describe cost estimation techniques CPA: Management Accounting/Problem-Solving and Decision-Making Bloomcode: Application 61. Smith Company is attempting to develop the cost function for repair costs. The following past data are available: Machine Hours Repair Costs 4,800 3,400 ,000 ,900 $6,385 4,585 5,285 7,085 Using the high-low method, what is the ixed repair coet? a) $1,185 b) $850 c)$475 d) $565 Answer:a Difficulty: Easy Learning Objective: Describe cost estimation techniques. CPA: Management Aocounting/Problem-Solving and Decision-Making Bloomcode: Application 62. Smith Company is attempting to develop the cost function for repair costs. The following past data are available: 4,800 3,400 4,000 ,900 $6,385 4,585 5,285 7,085 Using the high-low method, what is the estimated repair cost for 4,500 machine hours? a) $5,785 b) $5,585 c) $5,685 d) $5,985 Answer: c Difficulty: Medium Learning Objective: Describe cost estimation techniques. CPA: Management Accounting/Problem-Solving and Decision-Making Bloomcode: Application 63. Milano Company has an average overhead oost per hour of $10.50 at 3,500 machine hours and at 3,000 hours it is $11.25. The company managers wish to estimate the function. What is the variable overhead cost per machine hour? overhead cost a) $1.00 b) $2.00 c) $6.00 d) $8.00 Answer: Difficulty: Easy Learning Objective: Desaribe cost estimation techniques. CPA: Management Aocounting/Problem-Solving and Decision-Making Bloomcode: Applicatiorn 64. Milano Company has an average overhead cost per hour of $10.50 at 3,500 machine hours and at 3,000 hours it is $11.25. The company managers wish to estimate the overhead cost function. What is the fixed overhead cost? a) $15,750 b) $36,750 c) $21,000 d) $18,000 Answer: Difficulty: Easy Learning Objective: Describe cost estimation techniques. CPA: Management Accounting/Problem-Solving and Decision-Making

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