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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-8 section-5

Each section contains 100 MCQs on Costing .
71
In a given scenario, if cost is considered as indirect cost then independent variable will be considered as
Discuss
Answer & Solution
Answer: Option C
Solution:
In a given scenario, if cost is considered as indirect cost then independent variable will be considered as cost allocation base. An allocation base is the basis upon which an entity allocates its overhead costs.
72
Cost analysis method, which uses mathematical method to use fit between past data observations and cost functions is termed as
Discuss
Answer & Solution
Answer: Option A
Solution:
Cost analysis method, which uses mathematical method to use fit between past data observations and cost functions is termed as quantitative analysis method. Quantitative methods emphasize objective measurements and the statistical, mathematical, or numerical analysis of data collected through polls, questionnaires, and surveys, or by manipulating pre-existing statistical data using computational techniques.
73
Third step in estimation of cost function, by using quantitative analysis is collection of data for
Discuss
Answer & Solution
Answer: Option C
Solution:
Third step in estimation of cost function, by using quantitative analysis is collection of data for dependent variable and cost driver.
74
If residual error is 51 and predicted cost value is 37, then observed cost value will be
Discuss
Answer & Solution
Answer: Option B
Solution:
Observed cost value = Residual error + Predicted cost value
= 51 + 37 = 88
75
In estimation of cost function, an example of independent variable is
Discuss
Answer & Solution
Answer: Option A
Solution:
In estimation of cost function, an example of independent variable is level of activity. The activity level is the amount of an activity used by a cost object. The concept is employed in activity-based costing. If the activity level can be reduced, then activity costs should decline, thereby reducing the overall expenditure level of a business.
76
Formula of 1 - unexplained variation / total variation is used to calculate
Discuss
Answer & Solution
Answer: Option A
Solution:
Formula of 1 - unexplained variation / total variation is used to calculate coefficient of determination.
77
Cause and effect relationship that exists between change in total cost level and change in level of activity, is measured with help of
Discuss
Answer & Solution
Answer: Option B
Solution:
Cause and effect relationship that exists between change in total cost level and change in level of activity, is measured with help of cost driver. Cost drivers are the actual activities that cause the total cost in an activity cost pool to increase.
78
Cost that has elements of variable and fixed costs at same time is
Discuss
Answer & Solution
Answer: Option D
Solution:
Cost that has elements of variable and fixed costs at same time is mixed cost and semi variable cost.
79
If difference in costs is $32000 and slope coefficient is 0.40, then difference in machine hours would be
Discuss
Answer & Solution
Answer: Option A
Solution:
Difference in machine hours = Difference in costs ÷ Slope coefficient
= $32000 ÷ 0.40 = $80,000
80
In plotting of cost functions, level of activities according to which charged cost is represented on
Discuss
Answer & Solution
Answer: Option A
Solution:
In plotting of cost functions, level of activities according to which charged cost is represented on x-axis.