ExamVeda
Login
Home

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-3 section-5

Each section contains 100 MCQs on Costing .
21
Strength of relationship between cost driver and cost is considered as
Discuss
Answer & Solution
Answer: Option D
Solution:
Strength of relationship between cost driver and cost is considered as goodness of fit. Goodness of fit measures the degree of association between cost and activity.
22
In regression equation Y = $6000 + (per unit cost x number of units), '$6000' is a
Discuss
Answer & Solution
Answer: Option A
No explanation is given for this question. Let's Discuss on Board
23
In linear cost function, fixed cost is considered as
Discuss
Answer & Solution
Answer: Option A
Solution:
In linear cost function, fixed cost is considered as constant. Fixed costs refer to costs that do not vary with production volume. They remain relatively constant regardless of the company's level of production or business activity.
24
Description in mathematical form to represent changes in cost, with level of activity related to that cost is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Description in mathematical form to represent changes in cost, with level of activity related to that cost is classified as cost function. A cost function is a function of input prices and output quantity whose value is the cost of making that output given those input prices, often applied through the use of the cost curve by companies to minimize cost and maximize production efficiency.
25
In step cost functions, cost is increased by
Discuss
Answer & Solution
Answer: Option A
Solution:
In step cost functions, cost is increased by discrete amounts. A discrete quantity can only take on certain values.
26
Individual activities such as machine setups, material handling, customer service and distribution of products are a part of
Discuss
Answer & Solution
Answer: Option A
Solution:
Individual activities such as machine setups, material handling, customer service and distribution of products are a part of activity based costing. The Activity-Based Costing (ABC) is a costing system which focuses on activities performed to produce products.
27
A problem which arises because of presence of systematic pattern in residual value sequence is considered as
Discuss
Answer & Solution
Answer: Option D
Solution:
A problem which arises because of presence of systematic pattern in residual value sequence is considered as serial correlation and auto correlation.
28
If 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
Discuss
Answer & Solution
Answer: Option B
Solution:
Slope coefficient = Difference between costs linked to highest and lowest observation of cost driver ÷ Observation of cost driver
= $8000 ÷ 40 = $200
29
Standard error of regression analysis is known as
Discuss
Answer & Solution
Answer: Option B
Solution:
Standard error of regression analysis is known as variance of residual. It is also called unexplained variance.
30
An analysis and estimation method of cost, by classifying cost accounts as fixed or variable with respect for specific output level is considered as
Discuss
Answer & Solution
Answer: Option D
Solution:
An analysis and estimation method of cost, by classifying cost accounts as fixed or variable with respect for specific output level is considered as account analysis method. The account analysis method is a cost accounting method for estimating the different costs associated with producing a product.