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MCQOPTIONS
This section includes 137 Mcqs, each offering curated multiple-choice questions to sharpen your Cost Accounting knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
In the specification analysis, the assumptions related to linearity states but linearity must be within |
| A. | irrelevant range |
| B. | relevant range |
| C. | significant range |
| D. | insignificant range |
| Answer» C. significant range | |
| 2. |
If the residual error is 35 and the predicted cost value is 20, then the observed cost value will be |
| A. | 55 |
| B. | 15 |
| C. | 65 |
| D. | 85 |
| Answer» B. 15 | |
| 3. |
If the difference in costs is $32000 and the 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 | |
| 4. |
The formula of 1 - unexplained variation ⁄ total variation is used to calculate |
| A. | coefficient of determination |
| B. | coefficient of index |
| C. | coefficient of residual |
| D. | coefficient of prediction |
| Answer» B. coefficient of index | |
| 5. |
The method which considers the lowest and highest values of cost driver and cost within relevant range is called |
| A. | low high method |
| B. | constant equation |
| C. | variable equation |
| D. | high low method |
| Answer» E. | |
| 6. |
In cost accounting, the conference, quantitative analysis and account analysis methods are considered as |
| A. | cost estimation methods |
| B. | price estimation methods |
| C. | unit estimation method |
| D. | variable estimation method |
| Answer» B. price estimation methods | |
| 7. |
If the coefficients are similar for two accounting periods, then single cost relationship is estimated with the help of |
| A. | data of fixed cost |
| B. | cost driver of data |
| C. | pool of data |
| D. | cost object of data |
| Answer» D. cost object of data | |
| 8. |
An estimated coefficient, which indicates the degree by which the estimated values are affected by random factors is known as |
| A. | standard error of estimated coefficient |
| B. | weighted error of estimated coefficient |
| C. | average of estimated coefficient |
| D. | variance of estimated coefficient |
| Answer» B. weighted error of estimated coefficient | |
| 9. |
In quantitative analysis of estimating cost function, the last and foremost step is to |
| A. | evaluate variable driver |
| B. | evaluate cost driver |
| C. | evaluate price driver |
| D. | evaluate demand driver |
| Answer» C. evaluate price driver | |
| 10. |
If an unexplained variation is 456870 and the total variation is 955000, then the coefficient of determination will be |
| A. | 0.4528 |
| B. | 0.4783 |
| C. | 0.5216 |
| D. | 0.5425 |
| Answer» D. 0.5425 | |
| 11. |
The factor used to predict the dependent variable is named as |
| A. | independent variable |
| B. | function variable |
| C. | evaluation variable |
| D. | estimation variable |
| Answer» B. function variable | |
| 12. |
The first step in estimation of cost function by using quantitative analysis is to |
| A. | choose price estimation method |
| B. | choose dependent variable |
| C. | choose independent variable |
| D. | choose revenue estimation method |
| Answer» C. choose independent variable | |
| 13. |
The goodness of fit predicted values is also known as |
| A. | coefficient of determination |
| B. | coefficient of index |
| C. | coefficient of residual |
| D. | coefficient of prediction |
| Answer» B. coefficient of index | |
| 14. |
The worse fit between estimated cost and actual observations is shown on regression line with |
| A. | larger residual terms |
| B. | zero residual terms |
| C. | variable residual terms |
| D. | smaller residual terms |
| Answer» B. zero residual terms | |
| 15. |
In the linear cost function which is y=a + bx, the objective is to find the |
| A. | values of a and b |
| B. | values of x and y |
| C. | values of a and x |
| D. | values of b and y |
| Answer» B. values of x and y | |
| 16. |
An estimation of relationship between one independent variable and the dependent variable is known as |
| A. | simple regression |
| B. | Two way regression |
| C. | One variable series |
| D. | multiple regression |
| Answer» B. Two way regression | |
| 17. |
The description in mathematical form to represent changes in cost, with level of activity related to that cost is classified as |
| A. | cost function |
| B. | revenue function |
| C. | unit function |
| D. | relative function |
| Answer» B. revenue function | |
| 18. |
In linear cost function, the fixed cost is considered as |
| A. | constant |
| B. | variable |
| C. | exponent |
| D. | base |
| Answer» B. variable | |
| 19. |
The vertical dashed line in graphical representation of cost function represents the |
| A. | cost representation |
| B. | irrelevant range |
| C. | relevant range |
| D. | graphical representation |
| Answer» D. graphical representation | |
| 20. |
If the difference between costs linked to highest and lowest observation of cost driver, is $8000 and observation of cost driver is 40 machine hours, then slope coefficient will be |
| A. | $16,000 |
| B. | $200 |
| C. | $400 |
| D. | $20,000 |
| Answer» C. $400 | |
| 21. |
The higher level of production leads to |
| A. | higher repair cost |
| B. | higher setup cost |
| C. | lower repair cost |
| D. | higher setup cost |
| Answer» B. higher setup cost | |
| 22. |
If an unexplained variation is 350050 and the total variation is 700505, then coefficient of determination would be |
| A. | 3 |
| B. | 0.5003 |
| C. | 0.7003 |
| D. | 2 |
| Answer» C. 0.7003 | |
| 23. |
If the difference in costs is $16000 and the slope coefficient is 0.40, then difference in machine hours would be |
| A. | $50,000 |
| B. | $5,400 |
| C. | $6,400 |
| D. | $40,000 |
| Answer» E. | |
| 24. |
The work measurement method of cost estimation is also called |
| A. | price engineering method |
| B. | industrial engineering method |
| C. | measuring engineering method |
| D. | unit engineering method |
| Answer» C. measuring engineering method | |
| 25. |
In regression analysis, if the predicted cost value is 65 and observed cost value is 19 then the disturbance term will be |
| A. | 46 |
| B. | 56 |
| C. | 36 |
| D. | 76 |
| Answer» B. 56 | |
| 26. |
The function which is used to measure the decline in per unit cost of different business functions is classified as |
| A. | mixed curve |
| B. | experience curve |
| C. | discrete curve |
| D. | fixed curve |
| Answer» C. discrete curve | |
| 27. |
In estimation of cost function, an example of independent variable is |
| A. | level of activity |
| B. | quantity stored |
| C. | quantity manufactured |
| D. | quality of product |
| Answer» B. quantity stored | |
| 28. |
An assumption of specification analysis states: any observation does not belong to any other observation's residual value, is classified as |
| A. | independence of residuals |
| B. | dependence of residuals |
| C. | independence of correlation |
| D. | none of the above |
| Answer» B. dependence of residuals | |
| 29. |
If the difference between costs linked to highest and lowest observation of cost driver is $36000 and observation of cost driver is 30 machine hours, then slope coefficient would be |
| A. | $1,200 |
| B. | $1,400 |
| C. | $1,600 |
| D. | $1,800 |
| Answer» B. $1,400 | |
| 30. |
In the linear cost function, which is y = a + bx, the 'y' is classified as |
| A. | predicted fixed cost |
| B. | predicted variable cost |
| C. | predicted cost |
| D. | predicted price |
| Answer» D. predicted price | |
| 31. |
In adjustment issues of costing, the database must contain reliable measure of |
| A. | fixed cost driver |
| B. | cost driver and cost |
| C. | cost driver and object |
| D. | mixed cost driver |
| Answer» C. cost driver and object | |
| 32. |
The line which uses to join observations with lower and highest values of cost driver is called |
| A. | straight line |
| B. | curved line |
| C. | horizontal line |
| D. | vertical line |
| Answer» B. curved line | |
| 33. |
The statistical method used to measure average change in dependent variable, with respect to change of one unit in independent variable is called |
| A. | times series method |
| B. | time horizon method |
| C. | aggression method |
| D. | regression method |
| Answer» E. | |
| 34. |
The relationship between cost and cost driver is economically plausible if the goodness of fit |
| A. | has meaning |
| B. | has no meaning |
| C. | has index values |
| D. | has no index values |
| Answer» B. has no meaning | |
| 35. |
The component of total cost, which never changes with change in level of production is classified as |
| A. | fixed cost |
| B. | constant |
| C. | variable |
| D. | both a and b |
| Answer» B. constant | |
| 36. |
In adjustment issues and data collection, the inflation affects the |
| A. | cost driver and cost |
| B. | cost object and cost |
| C. | heterogeneous cost |
| D. | homogenous cost |
| Answer» B. cost object and cost | |
| 37. |
In regression analysis, if an observed cost value is 65 and the disturbance error is 32 then predicted cost value will be |
| A. | 97 |
| B. | 57 |
| C. | 33 |
| D. | 53 |
| Answer» D. 53 | |
| 38. |
The cost that has elements of variable and fixed costs at the same time is |
| A. | variable cost |
| B. | mixed cost |
| C. | semi variable cost |
| D. | both b and c |
| Answer» E. | |
| 39. |
The cause and effect relationship that exists between change in total cost level and change in level of activity, is measured with the help of |
| A. | production driver |
| B. | cost driver |
| C. | price driver |
| D. | estimation driver |
| Answer» C. price driver | |
| 40. |
The vertical difference, which measures distance between estimated and actual cost for every single observation is classified as |
| A. | residual term |
| B. | positive term |
| C. | negative term |
| D. | squared term |
| Answer» B. positive term | |
| 41. |
The strength of relationship between cost driver and cost is considered as |
| A. | badness of residual |
| B. | goodness of residual |
| C. | badness of fit |
| D. | goodness of fit |
| Answer» E. | |
| 42. |
In adjustment issues of costing, the database must consider wide range values of |
| A. | fixed object |
| B. | cost driver |
| C. | cost object |
| D. | mixed object |
| Answer» C. cost object | |
| 43. |
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. | manufacturing analysis method |
| B. | price analysis method |
| C. | unit analysis method |
| D. | account analysis method |
| Answer» E. | |
| 44. |
The cost analysis method, which uses mathematical method to use fit between past data observations and cost functions is termed as |
| A. | quantitative analysis method |
| B. | qualitative analysis method |
| C. | account analysis method |
| D. | conference analysis method |
| Answer» B. qualitative analysis method | |
| 45. |
The standard error of regression analysis is known as |
| A. | average of coefficient |
| B. | variance of residual |
| C. | mean of residual |
| D. | average of residual |
| Answer» C. mean of residual | |
| 46. |
In Regression Analysis, the testing of assumptions if these are true or not is classified as |
| A. | weighted analysis |
| B. | average analysis |
| C. | significance analysis |
| D. | specification analysis |
| Answer» E. | |
| 47. |
A technique which minimizes sum of squared vertical difference, to determine the regression line is considered as |
| A. | negative square technique |
| B. | positive square technique |
| C. | least square technique |
| D. | most square technique |
| Answer» D. most square technique | |
| 48. |
For slope coefficient b, the value of the estimated coefficient is considered as |
| A. | d-value |
| B. | c-value |
| C. | t-value |
| D. | b-value |
| Answer» D. b-value | |
| 49. |
The learning curve models include |
| A. | cumulative average time learning model |
| B. | incremental unit time learning model |
| C. | incremental production learning model |
| D. | both a and b |
| Answer» E. | |
| 50. |
To decide whether the cost is variable cost or fixed cost with respect to some specific activity depends upon |
| A. | units of labor |
| B. | unit of production |
| C. | time horizon |
| D. | units of inventory |
| Answer» D. units of inventory | |