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 31 of 48
- A. parallel correlation
- B. serial correlation
- C. auto correlation
- D. both B and C
Explanation: A systematic pattern among successive residuals is serial correlation, also called autocorrelation.
Correct answer: both B and C- A. manufacturing analysis method
- B. price analysis method
- C. unit analysis method
- D. account analysis method
Explanation: The account analysis method estimates cost behavior by reviewing individual accounts and classifying their costs as fixed or variable for…
Correct answer: account analysis method- A. One variable series
- B. multiple regression
- C. simple regression
- D. Two way regression
Explanation: Multiple regression estimates the relationship between one dependent variable and two or more independent variables.
Correct answer: multiple regression604. The second step for estimation of cost function by using quantitative analysis is to ___________?
- A. choose independent variable
- B. choose cost estimation method
- C. choose price estimation method
- D. choose dependent variable
Explanation: After identifying the dependent cost variable, the next step is to select the independent variable or cost driver that explains changes in…
Correct answer: choose independent variable- A. simple regression
- B. Two way regression
- C. One variable series
- D. multiple regression
Explanation: Simple regression examines the relationship between one independent variable and one dependent variable.
Correct answer: simple regression- A. independent variable
- B. function variable
- C. evaluation variable
- D. estimation variable
Explanation: The independent variable is the predictor, while the dependent variable is the outcome being predicted.
Correct answer: independent variable- A. activity coefficient
- B. cost coefficient
- C. change coefficient
- D. slope coefficient
Explanation: The slope coefficient measures the change in total cost for each one-unit change in the activity level.
Correct answer: slope coefficient- 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