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 6 of 14

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Q51.
An assumption, which states that there must be linear relationship between independent variable and dependent variable is

a.

irrelevant range of linearity

b.

relevant range of linearity

c.

significant range

d.

insignificant range

Discuss
Answer: (b).relevant range of linearity
Q52.
The vertical difference, which measures distance between estimated and actual cost for every single observation is classified as

a.

residual term

b.

positive term

c.

negative term

d.

squared term

Discuss
Answer: (a).residual term
Q53.
In cost accounting, the conference, quantitative analysis and account analysis methods are considered as

a.

cost estimation methods

b.

price estimation methods

c.

unit estimation method

d.

variable estimation method

Discuss
Answer: (a).cost estimation methods
Q54.
The component of total cost, which never changes with change in level of production is classified as

a.

fixed cost

b.

constant

c.

variable

d.

both a and b

Discuss
Answer: (a).fixed cost
Q55.
The strength of relationship between cost driver and cost is considered as

a.

badness of residual

b.

goodness of residual

c.

badness of fit

d.

goodness of fit

Discuss
Answer: (d).goodness of fit
Q56.
In the regression equation Y = $6000 + (per unit cost 'x' number of units), the '$6000' is a

a.

constant

b.

variable

c.

expression

d.

base and exponent

Discuss
Answer: (a).constant
Q57.
In linear cost function, the fixed cost is considered as

a.

constant

b.

variable

c.

exponent

d.

base

Discuss
Answer: (a).constant
Q58.
The description in mathematical form to represent changes in cost, with level of activity related to that cost is classified as

a.

cost function

b.

revenue function

c.

unit function

d.

relative function

Discuss
Answer: (a).cost function
Q59.
In step cost functions, the cost is increased by

a.

discrete amounts

b.

same amounts

c.

linear amounts

d.

nonlinear amounts

Discuss
Answer: (a).discrete amounts
Q60.
The individual activities such as machine setups, material handling, customer service and distribution of products are a part of

a.

activity based costing

b.

margin based costing

c.

goodness of costing

d.

handling based costing

Discuss
Answer: (a).activity based costing
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