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Costing MCQ Questions and Solutions with Explanations | Commerce

Costing MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Costing MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-2 section-5

Each section contains 100 MCQs on Costing .
11
If slope coefficient is 0.60 and difference in machine hours is 50000, then difference in cost can be
Discuss
Answer & Solution
Answer: Option C
Solution:
Slope coefficient = Difference in costs ÷ Difference in machine hours
Difference in cost = Difference in machine hours × Slope coefficient
= 50000 × 0.60 = $30,000
12
Fifth step in quantitative analysis of estimating cost function is to
Discuss
Answer & Solution
Answer: Option A
Solution:
Fifth step in quantitative analysis of estimating cost function is to estimate cost function. A cost estimate is the approximation of the cost of a program, project, or operation. The cost estimate is the product of the cost estimating process.
13
Lower level of production leads to
Discuss
Answer & Solution
Answer: Option B
Solution:
Lower level of production leads to lower repair cost.
14
In plotting cost functions, number of machine hours and batches are represented on
Discuss
Answer & Solution
Answer: Option D
Solution:
In plotting cost functions, number of machine hours and batches are represented on y-axis.
15
An error term, disturbance term or residual term is calculated as
Discuss
Answer & Solution
Answer: Option C
Solution:
An error term, disturbance term or residual term is calculated as u=Y-y.
16
Cost function, in which graph of total cost would not result in straight line is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Cost function, in which graph of total cost would not result in straight line is classified as nonlinear cost function. A nonlinear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is not a straight line.
17
An assumption, which states that there must be linear relationship between independent variable and dependent variable is
Discuss
Answer & Solution
Answer: Option B
Solution:
An assumption, which states that there must be linear relationship between independent variable and dependent variable is relevant range of linearity.
18
Vertical difference, which measures distance between estimated and actual cost for every single observation is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Vertical difference, which measures distance between estimated and actual cost for every single observation is classified as residual term.
19
In cost accounting, conference, quantitative analysis and account analysis methods are considered as
Discuss
Answer & Solution
Answer: Option A
Solution:
In cost accounting, conference, quantitative analysis and account analysis methods are considered as cost estimation methods. Cost estimation methods provide a way for companies to anticipate the costs involved in business operations and new undertakings.
20
Component of total cost, which never changes with change in level of production is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Component of total cost, which never changes with change in level of production is classified as fixed cost. A fixed cost is an expense that does not change as production volume increases or decreases within a relevant range.