137 + Mcqs in Cost Function and Behavior Page 3 McqOptions

101.	For estimation of each cost pool for cost function, the attention must be paid to
A.	cost object hierarchy
B.	management hierarchy
C.	price hierarchy
D.	cost hierarchy
Answer» E.

Discussion

102.	In assumptions testing, the violation of the constant variance is called
A.	heteroscedasticity
B.	heterogeneous
C.	homogenous
D.	homoscedasticity
Answer» B. heterogeneous

Discussion

103.	An implementation of activity based costing would be possible only if the accountants find
A.	goodness of each activity
B.	handling of each activity
C.	cost driver for each activity
D.	cost object for each activity
Answer» D. cost object for each activity

Discussion

104.	In the cause and effect relationship between cost level and cost driver, the inflationary price effects are removed by dividing cost through
A.	price index
B.	cost index
C.	profit index
D.	cost driver index
Answer» B. cost index

Discussion

105.	The weak relationship between cost and cost driver is indicated on a regression line, which is
A.	curved
B.	slightly sloped
C.	completely sloped
D.	dotted
Answer» C. completely sloped

Discussion

106.	The slope coefficient of cost function is zero because it intersects the
A.	x-axis at one
B.	y-axis at constant
C.	x-axis at constant
D.	y-axis at one
Answer» C. x-axis at constant

Discussion

107.	The type of relationship stating "how changes in cost driver drives cause changes in cost" will be termed as
A.	marginal plausibility
B.	economic plausibility
C.	financial plausibility
D.	market plausibility
Answer» C. financial plausibility

Discussion

108.	The goodness of fit is used to measure the wellness of
A.	actual values
B.	predicted values
C.	residual values
D.	indexed values
Answer» C. residual values

Discussion

109.	In quantitative analysis to estimate cost function, the fourth step is to
A.	write a liner function
B.	write price function
C.	write manufacturing function
D.	plot the data
Answer» E.

Discussion

110.	An assumption of specification analysis, which states all the values of residuals which are uniformly scattered around regression line is classified as
A.	abnormality of residuals
B.	normality of regression
C.	normality of residuals
D.	abnormality of regression
Answer» D. abnormality of regression

Discussion

111.	The large residual term and negative slope of line indicate
A.	inverse proportion
B.	direct proportion
C.	badness proportions
D.	goodness proportion
Answer» B. direct proportion

Discussion

112.	A concept used to define the learning curve in broader application is called
A.	discrete curve
B.	fixed curve
C.	mixed curve
D.	experience curve
Answer» E.

Discussion

113.	Which one of the following is the main advantage of quantitative method?
A.	non expression
B.	non constant
C.	objective
D.	non objective
Answer» D. non objective

Discussion

114.	The success of cost reduction initiatives are evaluated by accurate
A.	cyclical factors
B.	indexed technique
C.	price estimation
D.	cost estimation
Answer» E.

Discussion

115.	In dependent variable cost pool, the relationship between individual cost items and cost drivers can be classified as
A.	non homogeneous relationship
B.	homogeneous relationship
C.	an internal relationship
D.	an extreme relationship
Answer» B. homogeneous relationship

Discussion

116.	The chances of cost to be considered as variable are more, if the
A.	time horizons are long
B.	time horizons are short
C.	time horizons are irrelevant
D.	time horizons are relevant
Answer» B. time horizons are short

Discussion

117.	An error term, disturbance term or residual term is calculated as
A.	U=A-b
B.	u=A-a
C.	u=Y-y
D.	u=X-x
Answer» D. u=X-x

Discussion

118.	The value, which measures that how large is the value of standard error in relevance to value of estimated coefficient, is termed as
A.	t-value
B.	b-value
C.	d-value
D.	c-value
Answer» B. b-value

Discussion

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

Discussion

120.	The number of observations in regression analysis is considered as
A.	degree of possibility
B.	degree of average
C.	degree of variance
D.	degree of freedom
Answer» E.

Discussion

121.	Evaluation criteria of regression equation must be considered as
A.	goodness of fit
B.	economic plausibility
C.	significance of independent variable
D.	all of above
Answer» E.

Discussion

122.	The graphical representation of cost driver data and costs are considered as
A.	plotting the data
B.	plotting the costs
C.	plotting the cost drivers
D.	plotting curved line
Answer» B. plotting the costs

Discussion

123.	In assumptions of specific analysis, the normality of residuals is satisfied with the use of
A.	real price data
B.	real cost data
C.	multiplier data
D.	divisional data
Answer» C. multiplier data

Discussion

124.	In plotting the cost functions, the number of machine hours and batches are represented on
A.	unit axis
B.	term axis
C.	x-axis
D.	y-axis
Answer» E.

Discussion

125.	The lower level of production leads to
A.	higher setup cost
B.	lower repair cost
C.	higher setup cost
D.	higher repair cost
Answer» C. higher setup cost

Discussion

126.	The cost function, in which the graph of total cost would not result in straight line is classified as
A.	nonlinear cost function
B.	linear cost function
C.	linear price function
D.	nonlinear price function
Answer» B. linear cost function

Discussion

127.	The fifth step in quantitative analysis of estimating cost function is to
A.	estimate cost function
B.	estimate price function
C.	estimate supply function
D.	estimate demand function
Answer» B. estimate price function

Discussion

128.	In regression analysis, if the observed cost value is 50 and predicted cost value is 7, then the disturbance term will be
A.	57
B.	43
C.	67
D.	47
Answer» C. 67

Discussion

129.	The deviations between estimated regression line and the vertical deviations are classified as
A.	fixed terms
B.	indexed terms
C.	variable terms
D.	residual terms
Answer» E.

Discussion

130.	A helpful technique, for accurate forecasts about costs to be incurred in future is a part of
A.	unit estimation
B.	production estimation
C.	cost estimation
D.	price estimation
Answer» D. price estimation

Discussion

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

Discussion

132.	In the 'specification analysis', the assumptions related to residuals states must be
A.	worst
B.	independent
C.	dependent
D.	good
Answer» C. dependent

Discussion

133.	The relationship between cost and cost drivers is
A.	stationary
B.	not stationary
C.	intrinsic
D.	extrinsic
Answer» C. intrinsic

Discussion

134.	The cost pattern, in which production inputs are to be used in discrete functions, but the quantities are fractional, will be categorized as
A.	continuously variable cost function
B.	fixed cost function
C.	mixed cost function
D.	semi variable cost function
Answer» B. fixed cost function

Discussion

135.	The cost function, in which cost does not change with any change in level of activity is a part of
A.	step price functions
B.	step object functions
C.	step constant functions
D.	step cost functions
Answer» E.

Discussion

136.	The relationship based on unrelated level of activity and past data of cost is measured with the help of
A.	cost estimation
B.	price estimation
C.	unit estimation
D.	production estimation
Answer» B. price estimation

Discussion

137.	The range in which relationship exists between level of activity or total cost is called
A.	functional range
B.	relevant range
C.	unit range
D.	related range
Answer» C. unit range

Discussion

Explore topic-wise MCQs in Cost Accounting.

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

In assumptions testing, the violation of the constant variance is called

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

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

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

The slope coefficient of cost function is zero because it intersects the

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

The goodness of fit is used to measure the wellness of

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

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

The large residual term and negative slope of line indicate

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

Which one of the following is the main advantage of quantitative method?

The success of cost reduction initiatives are evaluated by accurate

In dependent variable cost pool, the relationship between individual cost items and cost drivers can be classified as

The chances of cost to be considered as variable are more, if the

An error term, disturbance term or residual term is calculated as

The value, which measures that how large is the value of standard error in relevance to value of estimated coefficient, is termed as

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

The number of observations in regression analysis is considered as

Evaluation criteria of regression equation must be considered as

The graphical representation of cost driver data and costs are considered as

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

In plotting the cost functions, the number of machine hours and batches are represented on

The lower level of production leads to

The cost function, in which the graph of total cost would not result in straight line is classified as

The fifth step in quantitative analysis of estimating cost function is to

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

The deviations between estimated regression line and the vertical deviations are classified as

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

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

In the 'specification analysis', the assumptions related to residuals states must be

The relationship between cost and cost drivers is

The cost pattern, in which production inputs are to be used in discrete functions, but the quantities are fractional, will be categorized as

The cost function, in which cost does not change with any change in level of activity is a part of

The relationship based on unrelated level of activity and past data of cost is measured with the help of

The range in which relationship exists between level of activity or total cost is called