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 62 of 99
- A. fixed cost driver
- B. cost driver and cost
- C. cost driver and object
- D. mixed cost driver
Explanation: Reliable cost estimation requires data showing both the cost driver and the related cost.
Correct answer: cost driver and cost- A. variable equation
- B. high low method
- C. low high method
- D. constant equation
Explanation: The high-low method is a commonly used quantitative technique for separating mixed costs into fixed and variable components.
Correct answer: high low method- A. 0.7
- B. 0.6
- C. 0.5
- D. 0.4
Explanation: A correlation above about 0.7 between independent variables is commonly treated as an indication of multicollinearity in introductory cost…
Correct answer: 0.7- A. general ledger
- B. non-achievable
- C. non measureable
- D. economically plausible
Explanation: A cost relationship should be economically plausible, meaning its direction and behavior should make sense in real operations.
Correct answer: economically plausible- A. cost driver and cost
- B. cost object and cost
- C. heterogeneous cost
- D. homogenous cost
Explanation: Inflation can change both the cost driver data and the recorded costs over time, making historical relationships unreliable unless…
Correct answer: cost driver and cost- A. conference method
- B. inference method
- C. pricing method
- D. manufacturing method
Explanation: The conference method estimates a cost function through informed opinions and discussion among people familiar with the costs and their…
Correct answer: conference method- A. values of a and b
- B. values of x and y
- C. values of a and x
- D. values of b and y
Explanation: In y = a + bx, a is the fixed-cost intercept and b is the variable-cost slope.
Correct answer: values of a and b- A. times series method
- B. time horizon method
- C. aggression method
- D. regression method
Explanation: Regression analysis measures the expected change in a dependent variable associated with a one-unit change in an independent variable.
Correct answer: regression method- A. negative square technique
- B. positive square technique
- C. least square technique
- D. most square technique
Explanation: The least-squares technique selects the regression line that minimizes the sum of squared vertical deviations between actual and estimated…
Correct answer: least square technique- A. variable residual terms
- B. smaller residual terms
- C. larger residual terms
- D. zero residual terms
Explanation: Residuals are the differences between actual and estimated costs, so smaller residuals indicate that the regression line fits the…
Correct answer: smaller residual terms- A. weighted analysis
- B. average analysis
- C. significance analysis
- D. specification analysis
Explanation: Specification analysis tests whether the assumptions and form used in a regression model are appropriate.
Correct answer: specification analysis- A. standard error of estimated coefficient
- B. weighted error of estimated coefficient
- C. average of estimated coefficient
- D. variance of estimated coefficient
Explanation: The standard error of an estimated coefficient measures the likely effect of random sampling factors on that estimate.
Correct answer: standard error of estimated coefficient- A. $1,200
- B. $1,400
- C. $1,600
- D. $1,800
Explanation: The slope coefficient equals the change in cost divided by the change in machine hours: $36,000 ÷ 30 = $1,200 per machine hour.
Correct answer: $1,200- A. price engineering method
- B. industrial engineering method
- C. measuring engineering method
- D. unit engineering method
Explanation: Work measurement estimates the time and resources required for production activities, so it is commonly called the industrial engineering…
Correct answer: industrial engineering method- A. larger residual terms
- B. zero residual terms
- C. variable residual terms
- D. smaller residual terms
Explanation: A regression line fits poorly when actual observations lie far from it, producing larger residual terms.
Correct answer: larger residual terms- A. cumulative average time learning model
- B. incremental unit time learning model
- C. incremental production learning model
- D. both a and b
Explanation: The two standard learning-curve models are the cumulative-average-time model and the incremental-unit-time model.
Correct answer: both a and b- A. $800
- B. $400
- C. $300
- D. $600
Explanation: The slope coefficient is the cost change per machine hour: $27,000 ÷ 90 = $300 per hour. This makes option c correct.
Correct answer: $300- A. 1.24
- B. 0.24
- C. 0.6
- D. 1.667
Explanation: The slope coefficient is calculated as change in cost divided by change in machine hours: $9,000 ÷ $15,000 = 0.6.
Correct answer: 0.6- A. demand allocation base
- B. supply allocation base
- C. cost allocation base
- D. price allocation base
Explanation: Indirect costs cannot be traced economically to one product or service, so they are assigned using a cost allocation base such as labour…
Correct answer: cost allocation base- A. cost and cost object
- B. price and cost driver
- C. dependent variable and cost driver
- D. independent variable and cost driver
Explanation: Quantitative cost-function analysis requires paired observations of the dependent variable, usually cost, and the independent variable…
Correct answer: dependent variable and cost driver