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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-9 section-5

Each section contains 100 MCQs on Costing .
81
Function used to measure decline in labour hours per unit as units of production increases is called
Discuss
Answer & Solution
Answer: Option B
Solution:
Function used to measure decline in labour hours per unit as units of production increases is called learning curve. A learning curve is a concept that graphically depicts the relationship between the cost and output over a defined period of time, normally to represent the repetitive task of an employee or worker.
82
In linear cost function, which is y = a + bx, y is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
In linear cost function, which is y = a + bx, y is classified as predicted cost. It is the estimation of future cost levels based on historical cost behaviour characteristics, using such statistical techniques as linear regression.
83
In specification analysis, assumptions related to linearity states but linearity must be within
Discuss
Answer & Solution
Answer: Option B
Solution:
In specification analysis, assumptions related to linearity states but linearity must be within relevant range.
84
In regression analysis, if predicted cost value is 65 and observed cost value is 19 then disturbance term will be
Discuss
Answer & Solution
Answer: Option A
Solution:
In regression analysis, if predicted cost value is 65 and observed cost value is 19 then disturbance term will be 46.
Disturbance term cost = Predicted cost value - Observed cost value
= 65 - 19 = 46.
85
In adjustment issues of costing, database must consider wide range values of
Discuss
Answer & Solution
Answer: Option B
Solution:
In adjustment issues of costing, database must consider wide range values of cost driver. A cost driver is the unit of an activity that causes the change in activity's cost.
86
Method, which considers cost and cost drivers of departments such as employee relations and process engineering is termed as
Discuss
Answer & Solution
Answer: Option C
Solution:
Method, which considers cost and cost drivers of departments such as employee relations and process engineering is termed as conference method. The conference method is an approach to cost estimation that pools together data, analyses, and knowledge from expert sources in order to make decisions about costs.
87
Examples of nonlinear cost functions are
Discuss
Answer & Solution
Answer: Option B
Solution:
Examples of nonlinear cost functions are step cost functions. The NCF represents a nonlinear multivariate functional of state variables.
88
Relationship between cost and cost driver is economically plausible if goodness of fit
Discuss
Answer & Solution
Answer: Option A
Solution:
Relationship between cost and cost driver is economically plausible if goodness of fit has meaning. The goodness of fit test is a statistical hypothesis test to see how well sample data fit a distribution from a population with a normal distribution. In other words, it tells you if your sample data represents the data you would expect to find in the actual population.
89
Situation in which two or more independent variables are highly correlated is known as
Discuss
Answer & Solution
Answer: Option D
Solution:
Situation in which two or more independent variables are highly correlated is known as multi-collinearity. Multicollinearity is the occurrence of high intercorrelations among independent variables in a multiple regression model.
90
First step in estimation of cost function by using quantitative analysis is to
Discuss
Answer & Solution
Answer: Option B
Solution:
First step in estimation of cost function by using quantitative analysis is to choose dependent variable. A dependent variable is what you measure in the experiment and what is affected during the experiment. The dependent variable responds to the independent variable. It is called dependent because it "depends" on the independent variable.