Cost Function and Behavior MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Cost Function and Behavior, a fundamental topic in the field of Cost Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Cost Function and Behavior MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Cost Function and Behavior mcq questions that explore various aspects of Cost Function and Behavior problems. Each MCQ is crafted to challenge your understanding of Cost Function and Behavior principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace Cost Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Cost Function and Behavior MCQs are your pathway to success in mastering this essential Cost Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Cost Function and Behavior. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

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Cost Function and Behavior MCQs | Page 3 of 14

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Q21.
An implementation of activity based costing would be possible only if the accountants find

a.

goodness of each activity

b.

handling of each activity

c.

cost driver for each activity

d.

cost object for each activity

Discuss
Answer: (c).cost driver for each activity
Q22.
In assumptions testing, the violation of the constant variance is called

a.

heteroscedasticity

b.

heterogeneous

c.

homogenous

d.

homoscedasticity

Discuss
Answer: (a).heteroscedasticity
Q23.
In the cause and effect relationship between cost level and cost driver, the inflationary price effects are removed by dividing cost through

a.

price index

b.

cost index

c.

profit index

d.

cost driver index

Discuss
Answer: (a).price index
Q24.
The weak relationship between cost and cost driver is indicated on a regression line, which is

a.

curved

b.

slightly sloped

c.

completely sloped

d.

dotted

Discuss
Answer: (b).slightly sloped
Q25.
For estimation of each cost pool for cost function, the attention must be paid to

a.

cost object hierarchy

b.

management hierarchy

c.

price hierarchy

d.

cost hierarchy

Discuss
Answer: (d).cost hierarchy
Q26.
A technique for estimating regression line, which minimizes the sum of vertical deviations squares is classified as

a.

variable technique

b.

least square technique

c.

indexed technique

d.

fixed technique

Discuss
Answer: (b).least square technique
Q27.
The type of relationship stating "how changes in cost driver drives cause changes in cost" will be termed as

a.

marginal plausibility

b.

economic plausibility

c.

financial plausibility

d.

market plausibility

Discuss
Answer: (b).economic plausibility
Q28.
The slope coefficient of cost function is zero because it intersects the

a.

x-axis at one

b.

y-axis at constant

c.

x-axis at constant

d.

y-axis at one

Discuss
Answer: (b).y-axis at constant
Q29.
An assumption of specification analysis, which states all the values of residuals which are uniformly scattered around regression line is classified as

a.

abnormality of residuals

b.

normality of regression

c.

normality of residuals

d.

abnormality of regression

Discuss
Answer: (c).normality of residuals
Q30.
The goodness of fit is used to measure the wellness of

a.

actual values

b.

predicted values

c.

residual values

d.

indexed values

Discuss
Answer: (b).predicted values
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