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 33 of 48
- A. economic series
- B. financial series
- C. time series
- D. analytical series
Explanation: A time series is data observed over successive periods, such as monthly production or cost figures for a plant.
Correct answer: time series- A. error term
- B. disturbance term
- C. relevant term
- D. both a and b
Explanation: In regression analysis, the residual is the unexplained part of the dependent variable and is called both the error term and the…
Correct answer: both a and b643. All the conditions or assumptions of regression analysis in simple regression can give __________?
- A. dependent estimation
- B. independent estimation
- C. reliable estimates
- D. unreliable estimates
Explanation: When the assumptions of simple regression are satisfied, the estimated coefficients and predictions are considered reliable.
Correct answer: reliable estimates- A. independent variable
- B. dependent variable
- C. significance plotting
- D. insignificance plotting
Explanation: Regression evaluation commonly tests whether an independent variable significantly explains changes in the dependent variable, usually…
Correct answer: independent variable- A. actual values
- B. predicted values
- C. residual values
- D. indexed values
Explanation: Goodness of fit shows how well the model’s predicted values correspond to the actual observed values, often through R² or related…
Correct answer: predicted values- A. marginal plausibility
- B. economic plausibility
- C. financial plausibility
- D. market plausibility
Explanation: Economic plausibility asks whether the estimated cost relationship makes economic sense, such as whether a cost driver logically causes…
Correct answer: economic plausibility- A. heteroscedasticity
- B. heterogeneous
- C. homogenous
- D. homoscedasticity
Explanation: Heteroscedasticity occurs when the variance of regression errors is not constant across observations.
Correct answer: heteroscedasticity- A. cyclical factors
- B. indexed technique
- C. price estimation
- D. cost estimation
Explanation: Cost reduction initiatives can be judged properly only when the costs expected to arise are estimated accurately.
Correct answer: cost estimation- A. fixed terms
- B. indexed terms
- C. variable terms
- D. residual terms
Explanation: A residual is the vertical difference between an observed value and the value predicted by the regression line.
Correct answer: residual terms- A. unit estimation
- B. production estimation
- C. cost estimation
- D. price estimation
Explanation: Cost estimation uses historical and analytical techniques to forecast the costs likely to be incurred in the future.
Correct answer: cost estimation- A. functional range
- B. relevant range
- C. unit range
- D. related range
Explanation: The relevant range is the activity interval within which cost behavior assumptions, such as fixed cost and variable cost rates, remain…
Correct answer: relevant range- A. stationary
- B. not stationary
- C. intrinsic
- D. extrinsic
Explanation: The cost-driver relationship is not stationary because technology, prices, efficiency and operating conditions can change over time.
Correct answer: not stationary- A. abnormality of residuals
- B. normality of regression
- C. normality of residuals
- D. abnormality of regression
Explanation: Normality of residuals means the errors are distributed around the regression line in a regular pattern, usually centered around zero.
Correct answer: normality of residuals- A. variable technique
- B. least square technique
- C. indexed technique
- D. fixed technique
Explanation: The least-squares technique estimates the line by minimizing the sum of squared vertical differences between observed and predicted cost…
Correct answer: least square technique- A. curved
- B. slightly sloped
- C. completely sloped
- D. dotted
Explanation: A weak relationship produces a regression line with a small slope, showing that changes in the cost driver cause relatively little change…
Correct answer: slightly sloped- A. non expression
- B. non constant
- C. objective
- D. non objective
Explanation: Quantitative methods use numerical data and statistical calculations, so they provide an objective basis for estimating costs.
Correct answer: objective- A. inverse proportion
- B. direct proportion
- C. badness proportions
- D. goodness proportion
Explanation: A negative slope means cost moves in the opposite direction to the cost driver, indicating an inverse relationship.
Correct answer: inverse proportion- A. write a liner function
- B. write price function
- C. write manufacturing function
- D. plot the data
Explanation: After collecting the observations, plotting the data helps reveal the relationship between cost and the suspected cost driver before the…
Correct answer: plot the data- A. goodness of fit
- B. economic plausibility
- C. significance of independent variable
- D. all of above
Explanation: A regression equation is evaluated for goodness of fit, economic plausibility and the statistical significance of its independent…
Correct answer: all of above- A. disadvantage of low high method
- B. disadvantage of high low method
- C. advantage of high low method
- D. advantage of low high method
Explanation: The high-low method estimates a cost function using only the highest and lowest activity observations, ignoring all other data points.
Correct answer: disadvantage of high low method