All Free Accounting MCQs with Answers
Every Accounting question in the bank, across all chapters, each with the correct answer and a written explanation. Free and unlimited, with no account needed.
1,971 questions · page 59 of 99
- A. 14
- B. 88
- C. 24
- D. 68
Explanation: Because residual error equals observed cost minus predicted cost, observed cost = 51 + 37 = 88.
Correct answer: 88- A. quantitative analysis method
- B. qualitative analysis method
- C. account analysis method
- D. conference analysis method
Explanation: Quantitative analysis uses mathematical or statistical techniques to fit past observations to a cost function.
Correct answer: quantitative analysis method- A. units of labor
- B. unit of production
- C. time horizon
- D. units of inventory
Explanation: Cost behavior depends on the relevant time horizon: a cost may be fixed in the short run but variable over a longer period.
Correct answer: time horizon- A. contractual agreement
- B. knowledge of operations
- C. measureable unit relationship
- D. all of above
Explanation: A cause-and-effect cost relationship may be established through contracts, operational knowledge, or a measurable unit relationship.
Correct answer: all of above- A. mixed curve
- B. experience curve
- C. discrete curve
- D. fixed curve
Explanation: The experience curve shows how average or per-unit cost declines as cumulative production experience increases.
Correct answer: experience curve- A. evaluate variable driver
- B. evaluate cost driver
- C. evaluate price driver
- D. evaluate demand driver
Explanation: After estimating the cost function, the analyst evaluates the cost driver to determine whether it adequately explains changes in cost.
Correct answer: evaluate cost driver1167. The Regression Analysis Method of quantitative analysis of cost function considers ____________?
- A. all data points
- B. One data point
- C. Two data points
- D. Four data points
Explanation: Regression analysis uses all available observations to calculate the best-fitting relationship between cost and the activity driver.
Correct answer: all data points- A. related total costs
- B. related fixed cost
- C. related variable cost
- D. related per unit cost
Explanation: Cost-function estimation examines how total costs change when the activity level changes.
Correct answer: related total costs- A. 0.4528
- B. 0.4783
- C. 0.5216
- D. 0.5425
Explanation: The coefficient of determination is 1 minus unexplained variation divided by total variation: 1 − 456,870/955,000 = 0.5216 approximately.
Correct answer: 0.5216- A. 110
- B. 125
- C. 60
- D. 70
Explanation: Observed cost equals predicted cost plus disturbance error, so predicted cost is 85 − 25 = 60.
Correct answer: 60- A. straight line
- B. curved line
- C. horizontal line
- D. vertical line
Explanation: When cost is assumed to change systematically with the cost driver, the observations are connected by a straight line.
Correct answer: straight line- A. higher repair cost
- B. higher setup cost
- C. lower repair cost
- D. higher setup cost
Explanation: Repair cost generally varies with the level of production because greater use causes more wear and maintenance needs.
Correct answer: higher repair cost- A. 2.571
- B. 0.39
- C. 0.2571
- D. 3.39
Explanation: The slope coefficient equals the change in cost divided by the change in machine hours: 7,000/18,000 = 0.3889, which rounds to 0.39.
Correct answer: 0.39- A. data of fixed cost
- B. cost driver of data
- C. pool of data
- D. cost object of data
Explanation: When the cost relationship remains stable across periods, observations from those periods are combined into a pool of data to estimate one…
Correct answer: pool of data- A. 100
- B. 25
- C. 50
- D. 75
Explanation: The residual equals observed cost minus predicted cost, so observed cost equals predicted cost plus residual: 50 + 25 = 75.
Correct answer: 75- A. independence of residuals
- B. dependence of residuals
- C. independence of correlation
- D. none of the above
Explanation: Independence of residuals means that one observation's error or residual is not related to another observation's residual.
Correct answer: independence of residuals- A. 33
- B. 91
- C. 81
- D. 43
Explanation: The disturbance term is the difference between observed and predicted cost: 62 − 29 = 33.
Correct answer: 33- A. coefficient of determination
- B. coefficient of index
- C. coefficient of residual
- D. coefficient of prediction
Explanation: The coefficient of determination, commonly written as R², measures how well the regression model fits or predicts the observed costs.
Correct answer: coefficient of determination- A. $16,000
- B. $200
- C. $400
- D. $20,000
Explanation: The slope coefficient equals the change in cost divided by the change in the cost driver: $8,000 ÷ 40 machine hours = $200 per machine hour.
Correct answer: $200- A. discrete amounts
- B. same amounts
- C. linear amounts
- D. nonlinear amounts
Explanation: A step cost stays constant over a relevant activity range and then rises in discrete amounts when the activity crosses a capacity…
Correct answer: discrete amounts