Costing

✅ The correct answer is D.
A problem which arises because of presence of systematic pattern in residual value sequence is considered as serial correlation and auto correlation.

✅ The correct answer is B.
Total Overhead = Direct service labour + Idle time wages + Overtime premium
= $5000 + $1000 + $450 = $6,450

✅ The correct answer is B.
Slope coefficient = Difference between costs linked to highest and lowest observation of cost driver ÷ Observation of cost driver
= $8000 ÷ 40 = $200

✅ The correct answer is D.

✅ The correct answer is C.
Cost which remains unchanged, in proportion to level total volume of production is classified as fixed cost. A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any specific business activities.

✅ The correct answer is B.
First step in developing an operating budget is to identify problem. An operating budget is a forecast of the revenues and expenses expected for one or more future periods.

✅ The correct answer is C.
The process of redistribution of service department costs to production departments is secondary distribution.

✅ The correct answer is C.
Technique that examines changes in results if original prediction would not be achieved is called sensitivity analysis. A sensitivity analysis determines how different values of an independent variable affect a particular dependent variable under a given set of assumptions.

✅ The correct answer is A.
Second step for estimation of cost function by using quantitative analysis is to choose independent variable. An independent variable is the variable that is changed or controlled in a scientific experiment to test the effects on the dependent variable.

✅ The correct answer is B.
Operating costing is more suitable for Services industries. Operating costs are expenses associated with the maintenance and administration of a business on a day-to-day basis.