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