1375 + Mcqs in Costing Page 4 McqOptions

151.	In multicollinearity, correlation coefficient between two independent variables must be greater than
A.	0.7
B.	0.6
C.	0.5
D.	0.4
Answer» B. 0.6

Discussion

152.	If residual error is 25 and predicted cost value is 50, then observed cost value would be
A.	00
B.	5
C.	0
D.	5
Answer» E.

Discussion

153.	Most frequently used methods of quantitative analysis include
A.	ariable equation
B.	igh low method
C.	ow high method
D.	onstant equation
Answer» C. ow high method

Discussion

154.	An estimation of relationship between two or more independent variables and dependent variable is classified as
A.	ne variable series
B.	ultiple regression
C.	imple regression
D.	wo way regression
Answer» C. imple regression

Discussion

155.	An analysis and estimation method of cost, by classifying cost accounts as fixed or variable with respect for specific output level is considered as
A.	anufacturing analysis method
B.	rice analysis method
C.	nit analysis method
D.	ccount analysis method
Answer» E.

Discussion

156.	Standard error of regression analysis is known as
A.	verage of coefficient
B.	ariance of residual
C.	ean of residual
D.	verage of residual
Answer» C. ean of residual

Discussion

157.	First step in estimation of cost function by using quantitative analysis is to
A.	hoose price estimation method
B.	hoose dependent variable
C.	hoose independent variable
D.	hoose cost estimation method
Answer» C. hoose independent variable

Discussion

158.	Situation in which two or more independent variables are highly correlated is known as
A.	rice linearity
B.	ost linearity
C.	ivision linearity
D.	ulti-collinearity
Answer» E.

Discussion

159.	Method, which considers cost and cost drivers of departments such as employee relations and process engineering is termed as
A.	ricing method
B.	anufacturing method
C.	onference method
D.	nference method
Answer» D. nference method

Discussion

160.	In adjustment issues of costing, database must consider wide range values of
A.	ixed object
B.	ost driver
C.	ost object
D.	ixed object
Answer» C. ost object

Discussion

161.	In regression analysis, if predicted cost value is 65 and observed cost value is 19 then disturbance term will be
A.	6
B.	6
C.	6
D.	6
Answer» B. 6

Discussion

162.	Function used to measure decline in labour hours per unit as units of production increases is called
A.	ixed curve
B.	earning curve
C.	inear curve
D.	ixed curve
Answer» C. inear curve

Discussion

163.	In plotting of cost functions, level of activities according to which charged cost is represented on
A.	-axis
B.	-axis
C.	nit axis
D.	erm axis
Answer» B. -axis

Discussion

164.	If difference in costs is $32000 and slope coefficient is 0.40, then difference in machine hours would be
A.	80,000
B.	12,800
C.	70,000
D.	22,800
Answer» B. 12,800

Discussion

165.	In a given scenario, if cost is considered as indirect cost then independent variable will be considered as
A.	emand allocation base
B.	upply allocation base
C.	ost allocation base
D.	rice allocation base
Answer» D. rice allocation base

Discussion

166.	To decide whether cost is variable cost or fixed cost with respect to some specific activity depends upon
A.	nits of labour
B.	nit of production
C.	ime horizon
D.	nits of inventory
Answer» D. nits of inventory

Discussion

167.	Cause and effect relationship between activity and costs is result of
A.	ontractual agreement
B.	nowledge of operations
C.	easureable unit relationship
D.	ll of above
Answer» E.

Discussion

168.	Formula of 1 - unexplained variation / total variation is used to calculate
A.	oefficient of determination
B.	oefficient of index
C.	oefficient of residual
D.	oefficient of prediction
Answer» B. oefficient of index

Discussion

169.	In estimation of cost function, an example of independent variable is
A.	evel of activity
B.	uantity stored
C.	uantity manufactured
D.	uality of product
Answer» B. uantity stored

Discussion

170.	If residual error is 51 and predicted cost value is 37, then observed cost value will be
A.	4
B.	8
C.	4
D.	8
Answer» C. 4

Discussion

171.	Individual activities such as machine setups, material handling, customer service and distribution of products are a part of
A.	ctivity based costing
B.	argin based costing
C.	oodness of costing
D.	andling based costing
Answer» B. argin based costing

Discussion

172.	In step cost functions, cost is increased by
A.	iscrete amounts
B.	ame amounts
C.	inear amounts
D.	onlinear amounts
Answer» B. ame amounts

Discussion

173.	Description in mathematical form to represent changes in cost, with level of activity related to that cost is classified as
A.	ost function
B.	evenue function
C.	nit function
D.	elative function
Answer» B. evenue function

Discussion

174.	In linear cost function, fixed cost is considered as
A.	onstant
B.	ariable
C.	xponent
D.	ase
Answer» B. ariable

Discussion

175.	Goodness of fit is used to measure wellness of
A.	ctual values
B.	redicted values
C.	esidual values
D.	ndexed values
Answer» C. esidual values

Discussion

176.	An assumption of specification analysis, which states all values of residuals which are uniformly scattered around regression line is classified as
A.	bnormality of residuals
B.	ormality of regression
C.	ormality of residuals
D.	bnormality of regression
Answer» D. bnormality of regression

Discussion

177.	Slope coefficient of cost function is zero because it intersects the
A.	-axis at one
B.	-axis at constant
C.	-axis at constant
D.	-axis at one
Answer» C. -axis at constant

Discussion

178.	Type of relationship stating "how changes in cost driver drives cause changes in cost" will be termed as
A.	arginal plausibility
B.	conomic plausibility
C.	inancial plausibility
D.	arket plausibility
Answer» C. inancial plausibility

Discussion

179.	A technique for estimating regression line, which minimizes sum of vertical deviations squares is classified as
A.	ariable technique
B.	east square technique
C.	ndexed technique
D.	ixed technique
Answer» C. ndexed technique

Discussion

180.	For estimation of each cost pool for cost function, attention must be paid to
A.	ost object hierarchy
B.	anagement hierarchy
C.	rice hierarchy
D.	ost hierarchy
Answer» E.

Discussion

181.	Weak relationship between cost and cost driver is indicated on a regression line, which is
A.	urved
B.	lightly sloped
C.	ompletely sloped
D.	otted
Answer» C. ompletely sloped

Discussion

182.	In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through
A.	rice index
B.	ost index
C.	rofit index
D.	ost driver index
Answer» B. ost index

Discussion

183.	In assumptions testing, violation of constant variance is called
A.	eteroscedasticity
B.	eterogeneous
C.	omogenous
D.	omoscedasticity
Answer» B. eterogeneous

Discussion

184.	An implementation of activity based costing would be possible only if accountants find
A.	oodness of each activity
B.	andling of each activity
C.	ost driver for each activity
D.	ost object for each activity
Answer» D. ost object for each activity

Discussion

185.	Which one of following is main advantage of quantitative method?
A.	on expression
B.	on constant
C.	bjective
D.	on objective
Answer» D. on objective

Discussion

186.	Success of cost reduction initiatives are evaluated by accurate
A.	yclical factors
B.	ndexed technique
C.	rice estimation
D.	ost estimation
Answer» E.

Discussion

187.	Large residual term and negative slope of line indicate
A.	nverse proportion
B.	irect proportion
C.	adness proportions
D.	oodness proportion
Answer» B. irect proportion

Discussion

188.	A concept used to define learning curve in broader application is called
A.	iscrete curve
B.	ixed curve
C.	ixed curve
D.	xperience curve
Answer» E.

Discussion

189.	In quantitative analysis to estimate cost function, fourth step is to
A.	rite a liner function
B.	rite price function
C.	rite manufacturing function
D.	lot data
Answer» E.

Discussion

190.	In assumptions of specific analysis, normality of residuals is satisfied with use of
A.	eal price data
B.	eal cost data
C.	ultiplier data
D.	ivisional data
Answer» C. ultiplier data

Discussion

191.	Evaluation criteria of regression equation must be considered as
A.	oodness of fit
B.	conomic plausibility
C.	ignificance of independent variable
D.	ll of above
Answer» E.

Discussion

192.	Graphical representation of cost driver data and costs is considered as
A.	lotting data
B.	lotting costs
C.	lotting cost drivers
D.	lotting curved line
Answer» B. lotting costs

Discussion

193.	Estimation of cost functions, an ignoring information from all points but considering two observation points can be classified as
A.	isadvantage of low high method
B.	isadvantage of high low method
C.	dvantage of high low method
D.	dvantage of low high method
Answer» C. dvantage of high low method

Discussion

194.	Number of observations in regression analysis is considered as
A.	egree of possibility
B.	egree of average
C.	egree of variance
D.	egree of freedom
Answer» E.

Discussion

195.	In regression analysis, if observed cost value is 50 and predicted cost value is 7, then disturbance term will be
A.	7
B.	3
C.	7
D.	7
Answer» C. 7

Discussion

196.	Deviations between estimated regression line and vertical deviations are classified as
A.	ixed terms
B.	ndexed terms
C.	ariable terms
D.	esidual terms
Answer» E.

Discussion

197.	In specification analysis, assumptions related to residuals states must be
A.	orst
B.	ndependent
C.	ependent
D.	ood
Answer» C. ependent

Discussion

198.	A helpful technique, for accurate forecasts about costs to be incurred in future is a part of
A.	nit estimation
B.	roduction estimation
C.	ost estimation
D.	rice estimation
Answer» D. rice estimation

Discussion

199.	Model which states decline in extra time needed to produce last unit, every time for cumulative quantity of doubled units produced is classified as
A.	ncremental unit average model
B.	ncremental cost learning model
C.	ncremental unit time learning model
D.	ncremental price learning model
Answer» D. ncremental price learning model

Discussion

200.	Relationship based on unrelated level of activity and past data of cost is measured with help of
A.	ost estimation
B.	rice estimation
C.	nit estimation
D.	roduction estimation
Answer» B. rice estimation

Discussion

Explore topic-wise MCQs in Commerce.

In multicollinearity, correlation coefficient between two independent variables must be greater than

If residual error is 25 and predicted cost value is 50, then observed cost value would be

Most frequently used methods of quantitative analysis include

An estimation of relationship between two or more independent variables and dependent variable is classified as

An analysis and estimation method of cost, by classifying cost accounts as fixed or variable with respect for specific output level is considered as

Standard error of regression analysis is known as

First step in estimation of cost function by using quantitative analysis is to

Situation in which two or more independent variables are highly correlated is known as

Method, which considers cost and cost drivers of departments such as employee relations and process engineering is termed as

In adjustment issues of costing, database must consider wide range values of

In regression analysis, if predicted cost value is 65 and observed cost value is 19 then disturbance term will be

Function used to measure decline in labour hours per unit as units of production increases is called

In plotting of cost functions, level of activities according to which charged cost is represented on

If difference in costs is $32000 and slope coefficient is 0.40, then difference in machine hours would be

In a given scenario, if cost is considered as indirect cost then independent variable will be considered as

To decide whether cost is variable cost or fixed cost with respect to some specific activity depends upon

Cause and effect relationship between activity and costs is result of

Formula of 1 - unexplained variation / total variation is used to calculate

In estimation of cost function, an example of independent variable is

If residual error is 51 and predicted cost value is 37, then observed cost value will be

Individual activities such as machine setups, material handling, customer service and distribution of products are a part of

In step cost functions, cost is increased by

Description in mathematical form to represent changes in cost, with level of activity related to that cost is classified as

In linear cost function, fixed cost is considered as

Goodness of fit is used to measure wellness of

An assumption of specification analysis, which states all values of residuals which are uniformly scattered around regression line is classified as

Slope coefficient of cost function is zero because it intersects the

Type of relationship stating "how changes in cost driver drives cause changes in cost" will be termed as

A technique for estimating regression line, which minimizes sum of vertical deviations squares is classified as

For estimation of each cost pool for cost function, attention must be paid to

Weak relationship between cost and cost driver is indicated on a regression line, which is

In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through

In assumptions testing, violation of constant variance is called

An implementation of activity based costing would be possible only if accountants find

Which one of following is main advantage of quantitative method?

Success of cost reduction initiatives are evaluated by accurate

Large residual term and negative slope of line indicate

A concept used to define learning curve in broader application is called

In quantitative analysis to estimate cost function, fourth step is to

In assumptions of specific analysis, normality of residuals is satisfied with use of

Evaluation criteria of regression equation must be considered as

Graphical representation of cost driver data and costs is considered as

Estimation of cost functions, an ignoring information from all points but considering two observation points can be classified as

Number of observations in regression analysis is considered as

In regression analysis, if observed cost value is 50 and predicted cost value is 7, then disturbance term will be

Deviations between estimated regression line and vertical deviations are classified as

In specification analysis, assumptions related to residuals states must be

A helpful technique, for accurate forecasts about costs to be incurred in future is a part of

Model which states decline in extra time needed to produce last unit, every time for cumulative quantity of doubled units produced is classified as

Relationship based on unrelated level of activity and past data of cost is measured with help of