Costing – Set 6 January 30, 2025 by aasi Home › Commerce › Costing Costing Costing – Set 6 📝 Model Practice Set ⚡ Instant Answers & Explanation 🎯 Exam Oriented 0% Report a question What’s wrong with this question? You cannot submit an empty report. Please add some details. 1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950 Costing – Set 6 Dear ! This is Costing – Set 6 Quiz and it contains 50 questions. Keep Learning! 1 / 50 1) In estimation of cost function, an example of independent variable is quality of product quantity stored quantity manufactured level of activity 2 / 50 2) Chances of cost to be considered as variable are more, if the time horizons are long time horizons are relevant time horizons are irrelevant time horizons are short 3 / 50 3) If actual result is $25000 and flexible budget amount is $11000, then flexible budget amount is $56,000 $14,000 $36,000 $46,000 4 / 50 4) First step in estimation of cost function by using quantitative analysis is to choose price estimation method choose dependent variable choose cost estimation method choose independent variable 5 / 50 5) Third step in estimation of cost function, by using quantitative analysis is collection of data for dependent variable and cost driver price and cost driver independent variable and cost driver cost and cost object 6 / 50 6) Relationship between cost and cost driver is economically plausible if goodness of fit has meaning has index values has no meaning has no index values 7 / 50 7) In estimation of cost functions, variations in a single activity level represents the related per unit cost related variable cost related fixed cost related total costs 8 / 50 8) In Regression Analysis, if an observed cost value is 85 and disturbance error is 25 then predicted cost value will be 125 60 70 110 9 / 50 9) Vertical dashed line in graphical representation of cost function represents the relevant range graphical representation irrelevant range cost representation 10 / 50 10) Slope coefficient of linear cost function is zero three one two 11 / 50 11) Value, which measures that how large is value of standard error in relevance to value of estimated coefficient is termed as t-value c-value b-value d-value 12 / 50 12) If residual error is 51 and predicted cost value is 37, then observed cost value will be 68 14 24 88 13 / 50 13) To decide whether cost is variable cost or fixed cost with respect to some specific activity depends upon units of labour units of inventory unit of production time horizon 14 / 50 14) Function used to measure decline in labour hours per unit as units of production increases is called linear curve learning curve mixed curve fixed curve 15 / 50 15) In adjustment issues of costing, database must consider wide range values of fixed object mixed object cost object cost driver 16 / 50 16) Function which is used to measure decline in per unit cost of different business functions is classified as experience curve mixed curve discrete curve fixed curve 17 / 50 17) If an unexplained variation is 350050 and total variation is 700505, then coefficient of determination would be 3 0.5003 0.7003 2 18 / 50 18) In quantitative analysis of estimating cost function, last and foremost step is to evaluate demand driver evaluate cost driver evaluate variable driver evaluate price driver 19 / 50 19) Examples of nonlinear cost functions are step cost functions step object functions step price functions step constant functions 20 / 50 20) Line which uses to join observations with lower and highest values of cost driver is called curved line horizontal line straight line vertical line 21 / 50 21) Cause and effect relationship that exists between change in total cost level and change in level of activity, is measured with help of production driver estimation driver cost driver price driver 22 / 50 22) In plotting of cost functions, level of activities according to which charged cost is represented on term axis x-axis unit axis y-axis 23 / 50 23) In dependent variable cost pool, relationship between individual cost items and cost drivers can be classified as an extreme relationship homogeneous relationship no homogeneous relationship heterogeneous relationship 24 / 50 24) If difference in costs is $32000 and slope coefficient is 0.40, then difference in machine hours would be $22,800 $70,000 $12,800 $80,000 25 / 50 25) Method which considers lowest and highest values of cost driver and cost within relevant range is called high low method low high method variable equation constant equation 26 / 50 26) For slope coefficient b, value of estimated coefficient is considered as b-value c-value t-value d-value 27 / 50 27) An estimated coefficient, which indicates degree by which estimated values are affected by random factors is known as variance of estimated coefficient standard error of estimated coefficient weighted error of estimated coefficient average of estimated coefficient 28 / 50 28) Learning curve models include incremental production learning model incremental unit time learning model cumulative average time learning model both a and b 29 / 50 29) If actual result is $26000, flexible budget amount is $13000, then flexible budget amount will be $13,000 $39,000 $49,000 $15,000 30 / 50 30) Considering relationship of variables, relationship in which activity cost is included in dependent variable, which has similar cost driver is classified as heterogeneous relationship homogeneous relationship no homogeneous relationship extreme relationship 31 / 50 31) A technique which minimizes sum of squared vertical difference, to determine regression line is considered as positive square technique least square technique negative square technique most square technique 32 / 50 32) Work measurement method of cost estimation is also called industrial engineering method price engineering method measuring engineering method unit engineering method 33 / 50 33) Situation in which two or more independent variables are highly correlated is known as division linearity price linearity multi-collinearity cost linearity 34 / 50 34) Better fit between estimated cost and actual observations is represented by zero residual terms variable residual terms smaller residual terms larger residual terms 35 / 50 35) In regression analysis, if predicted cost value is 65 and observed cost value is 19 then disturbance term will be 46 36 56 76 36 / 50 36) If difference between costs linked to highest and lowest observation of cost driver is $36000 and observation of cost driver is 30 machine hours, then slope coefficient would be $1,200 $1,800 $1,600 $1,400 37 / 50 37) Cause and effect relationship between activity and costs is result of knowledge of operations measureable unit relationship contractual agreement all of these 38 / 50 38) Method, which considers cost and cost drivers of departments such as employee relations and process engineering is termed as conference method inference method manufacturing method pricing method 39 / 50 39) Regression Analysis Method of quantitative analysis of cost function considers all data points One data point Four data points Two data points 40 / 50 40) Formula of 1 – unexplained variation / total variation is used to calculate coefficient of prediction coefficient of index coefficient of residual coefficient of determination 41 / 50 41) Worse fit between estimated cost and actual observations is shown on regression line with smaller residual terms larger residual terms zero residual terms variable residual terms 42 / 50 42) In linear cost function, which is y = a + bx, y is classified as predicted price predicted fixed cost predicted cost predicted variable cost 43 / 50 43) If an unexplained variation is 456870 and total variation is 955000, then coefficient of determination will be 0.4528 0.5425 0.4783 0.5216 44 / 50 44) If actual selling price is $500, actual result is $250 and actual units sold are 350, then selling price variance will be $97,500 $57,500 $87,500 $67,500 45 / 50 45) Cost that has elements of variable and fixed costs at same time is Both B and C variable cost mixed cost semi variable cost 46 / 50 46) In specification analysis, assumptions related to linearity states but linearity must be within insignificant range irrelevant range relevant range significant range 47 / 50 47) In a given scenario, if cost is considered as indirect cost then independent variable will be considered as supply allocation base demand allocation base price allocation base cost allocation base 48 / 50 48) In Regression Analysis, testing of assumptions if these are true or not is classified as specification analysis significance analysis weighted analysis average analysis 49 / 50 49) Flexible budget variance for revenues of company is classified as investment variance profit variance selling price variance primary variance 50 / 50 50) Cost analysis method, which uses mathematical method to use fit between past data observations and cost functions is termed as qualitative analysis method account analysis method conference analysis method quantitative analysis method Your score isThe average score is 0%🎉 Challenge alert! 💡 Share this quiz with your friends and see who scores the highest! 🏆🤩🔥 LinkedIn Facebook Follow Us @ 0% Restart quiz Exit We’d love to hear your thoughts! 📝 Share your valuable review with us. 🙌 🌟 Thank you for your support! 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