Free Cost Accounting MCQs with Answers
941 Cost Accounting MCQs from Accounting, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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941 questions · page 30 of 48
- A. plotting the data
- B. plotting the costs
- C. plotting the cost drivers
- D. plotting curved line
Explanation: Plotting the data means placing cost-driver observations and their corresponding costs on a graph, allowing the relationship and unusual…
Correct answer: plotting the data- A. 57
- B. 43
- C. 67
- D. 47
Explanation: The disturbance or residual equals observed cost minus predicted cost: 50 − 7 = 43.
Correct answer: 43583. In the 'specification analysis', the assumptions related to residuals states must be __________?
- A. worst
- B. independent
- C. dependent
- D. good
Explanation: Independent residuals do not systematically depend on one another, which is a key regression assumption.
Correct answer: independent- A. incremental unit average model
- B. incremental cost learning model
- C. incremental unit time learning model
- D. incremental price learning model
Explanation: The incremental unit time learning model focuses on the time required for the latest unit, which decreases whenever cumulative production…
Correct answer: incremental unit time learning model- A. cost estimation
- B. price estimation
- C. unit estimation
- D. production estimation
Explanation: Cost estimation uses past cost information and activity levels to measure or predict the relationship between cost and the cost driver.
Correct answer: cost estimation- A. marketing and financing
- B. price and costs
- C. input and output
- D. units and batches
Explanation: Industrial engineering estimates cost by studying the physical relationship between inputs, such as labor and materials, and outputs.
Correct answer: input and output- A. coefficient of residual
- B. coefficient of prediction
- C. coefficient of determination
- D. coefficient of index
Explanation: The coefficient of determination, R², measures the proportion of variation in dependent variable Y explained by independent variable X.
Correct answer: coefficient of determination- A. badness proportions
- B. goodness proportion
- C. inversely proportion
- D. directly proportion
Explanation: A positive slope shows that the dependent cost rises as the independent activity measure rises, indicating a direct relationship.
Correct answer: directly proportion- A. decrease in variance
- B. increase in variance error
- C. increase in standard error
- D. decrease in standard error
Explanation: Multicollinearity makes it difficult to separate the effects of correlated independent variables, so the variance of their estimated…
Correct answer: increase in standard error- A. homogenous
- B. homoscedasticity
- C. heteroscedasticity
- D. heterogeneous
Explanation: Constant variance of the errors is called homoscedasticity, from the idea of equal spread across observations.
Correct answer: homoscedasticity- A. cumulative average time learning model
- B. cumulative mean learning model
- C. cumulative weighted learning model
- D. cumulative average pricing model
Explanation: The cumulative average-time learning model assumes that each time cumulative output doubles, cumulative average time per unit falls by a…
Correct answer: cumulative average time learning model- A. $68,700
- B. $58,700
- C. $30,000
- D. $83,333.34
Explanation: The slope coefficient represents cost per machine hour, so the cost change is 0.60 × 50,000 = $30,000.
Correct answer: $30,000- A. estimate cost function
- B. estimate price function
- C. estimate supply function
- D. estimate demand function
Explanation: After defining the objective, identifying the cost driver, gathering data, and examining the data, the next step is to estimate the cost…
Correct answer: estimate cost function- A. nonlinear cost function
- B. linear cost function
- C. linear price function
- D. nonlinear price function
Explanation: A nonlinear cost function does not maintain a constant rate of change, so its total-cost graph is not a straight line.
Correct answer: nonlinear cost function- A. irrelevant range of linearity
- B. relevant range of linearity
- C. significant range
- D. insignificant range
Explanation: The relevant range is the normal activity interval within which the assumed linear relationship between the independent and dependent…
Correct answer: relevant range of linearity- A. cost estimation methods
- B. price estimation methods
- C. unit estimation method
- D. variable estimation method
Explanation: Conference, quantitative analysis, and account analysis are techniques used to estimate the behavior and amount of costs.
Correct answer: cost estimation methods- A. fixed cost
- B. constant
- C. variable
- D. both a and b
Explanation: A fixed cost remains unchanged in total when production volume changes within the relevant range.
Correct answer: fixed cost- A. constant
- B. variable
- C. expression
- D. base and exponent
Explanation: In Y = a + bX, the constant a is the intercept, representing the estimated cost when activity is zero.
Correct answer: constant- A. cost function
- B. revenue function
- C. unit function
- D. relative function
Explanation: A cost function expresses how total cost changes with an activity or output level, commonly as Y = a + bX.
Correct answer: cost function- A. activity based costing
- B. margin based costing
- C. goodness of costing
- D. handling based costing
Explanation: Activity-based costing assigns costs through activities such as machine setups, material handling, customer service and distribution.
Correct answer: activity based costing