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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.
| 51. |
In step cost functions, the cost is increased by |
| A. | discrete amounts |
| B. | same amounts |
| C. | linear amounts |
| D. | nonlinear amounts |
| Answer» B. same amounts | |
| 52. |
If an unexplained variation is 255050 and the total variation is 550505, then coefficient of determination will be |
| A. | 0.5063 |
| B. | 0.4633 |
| C. | 2.16 |
| D. | 0.5367 |
| Answer» E. | |
| 53. |
The relationship between independent variable and dependent variable must be |
| A. | general ledger |
| B. | non-achievable |
| C. | non measureable |
| D. | economically plausible |
| Answer» E. | |
| 54. |
The examples of nonlinear cost functions are |
| A. | step constant functions |
| B. | step cost functions |
| C. | step price functions |
| D. | step object functions |
| Answer» C. step price functions | |
| 55. |
The method of estimation of cost function, by making the opinions and analysis about cost and cost drivers is classified as |
| A. | conference method |
| B. | inference method |
| C. | pricing method |
| D. | manufacturing method |
| Answer» B. inference method | |
| 56. |
An amount by which the total cost changes with respect to the change in level of activity is classified as |
| A. | activity coefficient |
| B. | cost coefficient |
| C. | change coefficient |
| D. | slope coefficient |
| Answer» E. | |
| 57. |
In regression analysis, if the observed cost value is 62 and predicted cost value is 29, then the disturbance term would be |
| A. | 33 |
| B. | 91 |
| C. | 81 |
| D. | 43 |
| Answer» B. 91 | |
| 58. |
If the difference between costs linked to highest and lowest observation of cost driver is $27000 and observation of cost driver is 90 machine hours, then slope coefficient would be |
| A. | $800 |
| B. | $400 |
| C. | $300 |
| D. | $600 |
| Answer» D. $600 | |
| 59. |
Within the relevant range, the cost function in which cost does not change in narrow ranges of activity is called |
| A. | fixed cost function |
| B. | variable cost function |
| C. | step variable cost function |
| D. | step fixed cost function |
| Answer» D. step fixed cost function | |
| 60. |
A problem which arises because of the presence of systematic pattern in residual value sequence is considered as |
| A. | parallel correlation |
| B. | serial correlation |
| C. | auto correlation |
| D. | both b and c |
| Answer» E. | |
| 61. |
The situation in which two or more independent variables are highly correlated is known as |
| A. | price linearity |
| B. | cost linearity |
| C. | division linearity |
| D. | multi-collinearity |
| Answer» E. | |
| 62. |
Considering the relationship of variables, the relationship in which the activity cost is included in the dependent variable, which has similar cost driver is classified as |
| A. | heterogeneous relationship |
| B. | extreme relationship |
| C. | no homogeneous relationship |
| D. | homogeneous relationship |
| Answer» E. | |
| 63. |
In the regression equation Y = $6000 + (per unit cost 'x' number of units), the '$6000' is a |
| A. | constant |
| B. | variable |
| C. | expression |
| D. | base and exponent |
| Answer» B. variable | |
| 64. |
The slope coefficient of linear cost function is |
| A. | zero |
| B. | one |
| C. | two |
| D. | three |
| Answer» B. one | |
| 65. |
The method, which considers the cost and cost drivers of departments such as employee relations and process engineering is termed as |
| A. | pricing method |
| B. | manufacturing method |
| C. | conference method |
| D. | inference method |
| Answer» D. inference method | |
| 66. |
The individual activities such as machine setups, material handling, customer service and distribution of products are a part of |
| A. | activity based costing |
| B. | margin based costing |
| C. | goodness of costing |
| D. | handling based costing |
| Answer» B. margin based costing | |
| 67. |
In estimation of cost functions, the variations in a single activity level represents the |
| A. | related total costs |
| B. | related fixed cost |
| C. | related variable cost |
| D. | related per unit cost |
| Answer» B. related fixed cost | |
| 68. |
An assumption, which states that there must be linear relationship between independent variable and dependent variable is |
| A. | irrelevant range of linearity |
| B. | relevant range of linearity |
| C. | significant range |
| D. | insignificant range |
| Answer» C. significant range | |
| 69. |
The most frequently used methods of quantitative analysis include |
| A. | variable equation |
| B. | high low method |
| C. | low high method |
| D. | constant equation |
| Answer» C. low high method | |
| 70. |
The Regression Analysis Method of quantitative analysis of cost function considers |
| A. | all data points |
| B. | One data point |
| C. | Two data points |
| D. | Four data points |
| Answer» B. One data point | |
| 71. |
The better fit between estimated cost and actual observations is represented by |
| A. | variable residual terms |
| B. | smaller residual terms |
| C. | larger residual terms |
| D. | zero residual terms |
| Answer» C. larger residual terms | |
| 72. |
In multicollinearity, the 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 | |
| 73. |
In Regression Analysis, if an observed cost value is 85 and the disturbance error is 25 then predicted cost value will be |
| A. | 110 |
| B. | 125 |
| C. | 60 |
| D. | 70 |
| Answer» D. 70 | |
| 74. |
The second step for estimation of cost function by using quantitative analysis is to |
| A. | choose independent variable |
| B. | choose cost estimation method |
| C. | choose price estimation method |
| D. | choose dependent variable |
| Answer» B. choose cost estimation method | |
| 75. |
As compared to cumulative average-time learning model, the learning model which predicts more cumulative total time to produce more units is known as |
| A. | incremental unit time learning model |
| B. | incremental price learning model |
| C. | incremental unit average model |
| D. | incremental cost learning model |
| Answer» B. incremental price learning model | |
| 76. |
The constant variance is classified in assumptions testing as |
| A. | homogenous |
| B. | homoscedasticity |
| C. | heteroscedasticity |
| D. | heterogeneous |
| Answer» C. heteroscedasticity | |
| 77. |
In the specification analysis, the assumptions related to variance state that: |
| A. | variance of residuals is constant |
| B. | variance of goodness is constant |
| C. | goodness of fit is constant |
| D. | standard error is constant |
| Answer» B. variance of goodness is constant | |
| 78. |
The model, in which the produced unit doubles every time as the cumulative average time per unit decreases, by a constant percentage can be classified as |
| A. | cumulative average time learning model |
| B. | cumulative mean learning model |
| C. | cumulative weighted learning model |
| D. | cumulative average pricing model |
| Answer» B. cumulative mean learning model | |
| 79. |
If the slope coefficient is 0.60 and the difference in machine hours is $50000, then difference in cost can be |
| A. | $68,700 |
| B. | $58,700 |
| C. | $30,000 |
| D. | $83,333.34 |
| Answer» D. $83,333.34 | |
| 80. |
The third step in estimation of cost function, by using quantitative analysis is collection of data for |
| A. | cost and cost object |
| B. | price and cost driver |
| C. | dependent variable and cost driver |
| D. | independent variable and cost driver |
| Answer» D. independent variable and cost driver | |
| 81. |
If the residual error is 51 and the predicted cost value is 37, then the observed cost value will be |
| A. | 14 |
| B. | 88 |
| C. | 24 |
| D. | 68 |
| Answer» C. 24 | |
| 82. |
If the difference in costs is $7000 and the difference in machine hours of is $18000, then slope coefficient would be |
| A. | 2.571 |
| B. | 0.39 |
| C. | 0.2571 |
| D. | 3.39 |
| Answer» C. 0.2571 | |
| 83. |
If the difference in costs is $9000 and the difference in machine hours is $15000, then slope coefficient would be |
| A. | 1.24 |
| B. | 0.24 |
| C. | 0.6 |
| D. | 1.667 |
| Answer» D. 1.667 | |
| 84. |
The cause and effect relationship between activity and costs is the result of |
| A. | contractual agreement |
| B. | knowledge of operations |
| C. | measureable unit relationship |
| D. | all of above |
| Answer» E. | |
| 85. |
The function used to measure decline in labor hours per unit as the units of production increases is called |
| A. | fixed curve |
| B. | learning curve |
| C. | linear curve |
| D. | mixed curve |
| Answer» C. linear curve | |
| 86. |
If the residual error is 25 and the predicted cost value is 50, then the observed cost value would be |
| A. | 100 |
| B. | 25 |
| C. | 50 |
| D. | 75 |
| Answer» E. | |
| 87. |
In a given scenario, if the cost is considered as indirect cost then independent variable will be considered as |
| A. | demand allocation base |
| B. | supply allocation base |
| C. | cost allocation base |
| D. | price allocation base |
| Answer» D. price allocation base | |
| 88. |
An estimation of relationship between two or more independent variables and the dependent variables are classified as |
| A. | One variable series |
| B. | multiple regression |
| C. | simple regression |
| D. | Two way regression |
| Answer» C. simple regression | |
| 89. |
In plotting of cost functions, the level of activities according to which the charged cost is represented on |
| A. | x-axis |
| B. | y-axis |
| C. | unit axis |
| D. | term axis |
| Answer» B. y-axis | |
| 90. |
The percentage of variation in the 'Y' explained by the 'X' is measured by |
| A. | coefficient of residual |
| B. | coefficient of prediction |
| C. | coefficient of determination |
| D. | coefficient of index |
| Answer» D. coefficient of index | |
| 91. |
The residual term is also considered as |
| A. | error term |
| B. | disturbance term |
| C. | relevant term |
| D. | both a and b |
| Answer» E. | |
| 92. |
A technique for estimating regression line, which minimizes the sum of vertical deviations squares is classified as |
| A. | variable technique |
| B. | least square technique |
| C. | indexed technique |
| D. | fixed technique |
| Answer» C. indexed technique | |
| 93. |
The small residual terms and positive slope of line indicate |
| A. | badness proportions |
| B. | goodness proportion |
| C. | inversely proportion |
| D. | directly proportion |
| Answer» E. | |
| 94. |
The individual variable coefficient's multicollinearity leads to |
| A. | decrease in variance |
| B. | increase in variance error |
| C. | increase in standard error |
| D. | decrease in standard error |
| Answer» D. decrease in standard error | |
| 95. |
An analysis of data over successive past periods, which pertain to some plant, activity and organization is called |
| A. | economic series |
| B. | financial series |
| C. | time series |
| D. | analytical series |
| Answer» D. analytical series | |
| 96. |
The slope coefficient is 0.75 and the difference in machine hours is $65000, then difference in cost would be |
| A. | $86,667 |
| B. | $48,750 |
| C. | $85,000 |
| D. | $55,000 |
| Answer» B. $48,750 | |
| 97. |
In regression equation, an evaluation criteria considers the significance of |
| A. | independent variable |
| B. | dependent variable |
| C. | significance plotting |
| D. | insignificance plotting |
| Answer» B. dependent variable | |
| 98. |
The high-low method is used for estimation of |
| A. | linear coefficient |
| B. | cost coefficient |
| C. | slope coefficient |
| D. | price coefficient |
| Answer» D. price coefficient | |
| 99. |
Industrial engineering method is used to analyze the relationship between |
| A. | marketing and financing |
| B. | price and costs |
| C. | input and output |
| D. | units and batches |
| Answer» D. units and batches | |
| 100. |
All the conditions or assumptions of regression analysis in simple regression can give |
| A. | dependent estimation |
| B. | independent estimation |
| C. | reliable estimates |
| D. | unreliable estimates |
| Answer» D. unreliable estimates | |