Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Question
Chapter 3, Problem 10DQ
To determine
Describe the method of least squares and explain the reason for which least square method is better than either the high-low method or the scatterplot method.
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Check out a sample textbook solutionStudents have asked these similar questions
How does it compare with the NPV based on the WACC method? (Select the best choice below.)
A.
The NPV computed using the FTE method cannot be compared to the NPV based on the WACC method.
B.
The NPV computed using the FTE method is always higher than the NPV based on the WACC method.
C.
The NPV computed using the FTE method is always lower than the NPV based on the WACC method.
D.
The NPV computed using the FTE method is the same as the NPV based on the WACC method.
What are the advantages of the scattergraph method over the high-low method? Thehigh-low method over the scattergraph method?
The FIFO method provides a major advantage over the weighted-average method in that______?
Chapter 3 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 3 - Why is knowledge of cost behavior important for...Ch. 3 - How does the length of the time horizon affect the...Ch. 3 - Prob. 3DQCh. 3 - What is the relationship between flexible...Ch. 3 - What is the relationship between committed...Ch. 3 - Describe the difference between a variable cost...Ch. 3 - Why do mixed costs pose a problem when it comes to...Ch. 3 - Why is a scattergraph a good first step in...Ch. 3 - What are the advantages of the scatterplot method...Ch. 3 - Prob. 10DQ
Ch. 3 - What is meant by the best-fitting line? Is the...Ch. 3 - When is multiple regression required to explain...Ch. 3 - Explain the meaning of the learning curve. How do...Ch. 3 - Assume you are the manager responsible for...Ch. 3 - Some firms assign mixed costs to either the fixed...Ch. 3 - Callies Gym is a complete fitness center. Owner...Ch. 3 - Corazon Manufacturing Company has a purchasing...Ch. 3 - Darnell Poston, owner of Poston Manufacturing,...Ch. 3 - Dohini Manufacturing Company had the following 12...Ch. 3 - Refer to Cornerstone Exercise 3.4 for data on...Ch. 3 - The controller for Dohini Manufacturing Company...Ch. 3 - Prob. 7CECh. 3 - State Universitys football team just received a...Ch. 3 - Classify the following costs of activity inputs as...Ch. 3 - SmokeCity, Inc., manufactures barbeque smokers....Ch. 3 - Cashion Company produces chemical mixtures for...Ch. 3 - For the following activities and their associated...Ch. 3 - Prob. 13ECh. 3 - Vargas, Inc., produces industrial machinery....Ch. 3 - Penny Davis runs the Shear Beauty Salon near a...Ch. 3 - Shirrell Blackthorn is the accountant for several...Ch. 3 - Deepa Dalal opened a free-standing radiology...Ch. 3 - Prob. 18ECh. 3 - The controller of the South Charleston plant of...Ch. 3 - Lassiter Company used the method of least squares...Ch. 3 - Sweet Dreams Bakery was started five years ago by...Ch. 3 - Ginnian and Fitch, a regional accounting firm,...Ch. 3 - Bordner Company manufactures HVAC (heating,...Ch. 3 - Sharon Glessing, controller for Janson Company,...Ch. 3 - The graphs below represent cost behavior patterns...Ch. 3 - Starling Co. manufactures one product with a...Ch. 3 - Alard Manufacturing Company has a billing...Ch. 3 - Prob. 28ECh. 3 - Prob. 29ECh. 3 - Natur-Gro, Inc., manufactures composters. Based on...Ch. 3 - Rolertyme Company manufactures roller skates. With...Ch. 3 - St. Teresas Medical Center (STMC) offers a number...Ch. 3 - Big Mikes, a large hardware store, has gathered...Ch. 3 - Kimball Company has developed the following cost...Ch. 3 - The management of Wheeler Company has decided to...Ch. 3 - DeMarco Company is developing a cost formula for...Ch. 3 - Weber Valley Regional Hospital has collected data...Ch. 3 - Friendly Bank is attempting to determine the cost...Ch. 3 - Randy Harris, controller, has been given the...Ch. 3 - The Lockit Company manufactures door knobs for...Ch. 3 - Harriman Industries manufactures engines for the...Ch. 3 - Thames Assurance Company sells a variety of life...
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Similar questions
What are the advantages of the scatterplot method over the high-low method? The high-low method over the scatterplot method?
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Under what conditions will the weighted average and FIFO methods give essentially the same results?
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What are the advantage of the scattergraph method over the high-low
method? The high-low method over the scattergraph method?
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What is the put-call ratio? What is it used for? What are considered high and low values and what do the high and low values indicate?
No plagiarims.
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Which of the following statements are true?
A. The lower the M-squared the better.
B. The higher the T-squared the better.
C. The lower the Sharpe ratio the better.
D. The higher the Jensen's alpha the better.
E. The higher the Treynor ratio the better.
Group of answer choices
A, B, and D
A, B, and C
D and E
B, C, and D
B, D, and E
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Discuss the main difference between the single-index model and the Markowitz optimization model.
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Explain the shape of the Markowitz (that is, mean-variance) efficient frontier, specifically what causes it to be curved rather than a straight line.
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Choose the correct letter of answer
In using least-squares to estimate the variable and the fixed components in a mixed cost, these two formulas are very useful: ∑XY = a∑X + b∑X2 and ∑Y = an + b∑X. Which unknown value can be computed after eliminating the first variable? a.) ab.) yc.) xd.) b
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Which of the following statements about Least Squares Regression is not true ?
Least -squares regression is a mathematical technique to fit a cost -estimating equation to observed data .
In least -squares regression , a statistical measure (R -squared ) can be used to determine how well the equation fits the data .
Least -squares regression is considered superior to the high -low method because it uses more data points than just the high and low points
None of the listed choices are the correct answer because all of the listed choices are true .
Least -squares regression maximizes the vertical squared difference between the estimated and actual costs at each data point .
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What is the high low method?
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From the standpoint of cost control, why is the FIFO method superior to the weighted-averagemethod?
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Which of the following methods of cost estimation relies on only two data points?A. the high-low methodB. account analysisC. least-squares regressionD. SWOT analysis.
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