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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-4 section-5

Each section contains 100 MCQs on Costing .
31
An estimation of relationship between two or more independent variables and dependent variable is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
An estimation of relationship between two or more independent variables and dependent variable is classified as multiple regression. Multiple regression is an extension of simple linear regression. It is used when we want to predict the value of a variable based on the value of two or more other variables.
32
Second step for estimation of cost function by using quantitative analysis is to
Discuss
Answer & Solution
Answer: Option A
Solution:
Second step for estimation of cost function by using quantitative analysis is to choose independent variable. An independent variable is the variable that is changed or controlled in a scientific experiment to test the effects on the dependent variable.
33
An estimation of relationship between one independent variable and dependent variable is known as
Discuss
Answer & Solution
Answer: Option A
Solution:
An estimation of relationship between one independent variable and dependent variable is known as simple regression. Simple linear regression is a statistical method that allows us to summarize and study relationships between two continuous (quantitative) variables.
34
Goodness of fit predicted values is also known as
Discuss
Answer & Solution
Answer: Option A
Solution:
Goodness of fit predicted values is also known as coefficient of determination. The coefficient of determination (denoted by R2) is a key output of regression analysis. It is interpreted as the proportion of the variance in the dependent variable that is predictable from the independent variable.
35
Factor used to predict dependent variable is named as
Discuss
Answer & Solution
Answer: Option A
Solution:
Factor used to predict dependent variable is named as independent variable. An independent variable is the variable that is changed or controlled in a scientific experiment to test the effects on the dependent variable.
36
In regression analysis, if observed cost value is 62 and predicted cost value is 29, then disturbance term would be
Discuss
Answer & Solution
Answer: Option A
Solution:
Disturbance term = Observed cost value ÷ Predicted cost value
= 62 - 29 = 33
37
An amount by which total cost changes with respect to change in level of activity is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
An amount by which total cost changes with respect to change in level of activity is classified as slope coefficient. The slope coefficient usually refers to the coefficient of any independent variable, x, in a regression equation.
38
An assumption of specification analysis states: any observation does not belong to any other observation's residual value, is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
An assumption of specification analysis states: any observation does not belong to any other observation's residual value, is classified as independence of residuals. These residual plots can be used to assess the quality of the regression.
39
Most frequently used methods of quantitative analysis include
Discuss
Answer & Solution
Answer: Option B
Solution:
Most frequently used methods of quantitative analysis include high low method. The high low method and regression analysis are the two main cost estimation methods used to estimate the amounts of fixed and variable costs.
40
If residual error is 25 and predicted cost value is 50, then observed cost value would be
Discuss
Answer & Solution
Answer: Option D
Solution:
Observed cost value = Predicted cost value + Residual error
= 50 + 25 = 75