Costing mcqs

✅ The correct answer is D.
Labour which works as forklift truck, plant guards and rework labour is classified as manufacturing overhead. Manufacturing overhead is all indirect costs incurred during the production process. This overhead is applied to the units produced within a reporting period.

✅ The correct answer is A.
Large residual term and negative slope of line indicate inverse proportion.

✅ The correct answer is B.
A group of individual indirect cost item is defined as cost pool. Cost pools is an accounting term that refers to groups of accounts serving to express the cost of goods and service allocatable within a business or manufacturing organization.

✅ The correct answer is D.
An approach which yields benefits of normal costing and actual manufacturing overhead is classified as adjusted allocation rate approach. The adjusted allocation-rate approach restates or corrects estimated overhead costs booked throughout the year, so that the actual overhead costs are recorded properly.

✅ The correct answer is C.
Budgeted annual indirect costs are divided to budgeted annual quantity of cost allocation base to calculate budgeted indirect cost rate. The budgeted indirect cost rate formula is calculated by dividing the budgeted annual indirect costs by the budgeted annual quantity of the cost allocation base.

✅ The correct answer is D.
Deviations between estimated regression line and vertical deviations are classified as residual terms.

✅ The correct answer is A.
The allotment of whole item of cost to cost centre or cost units is called cost allocation. The term allocation means the allotment of the whole item without division to a particular department or cost centre.

✅ The correct answer is C.

✅ The correct answer is B.
Constant variance is classified in assumptions testing as homoscedasticity. The assumption of homoscedasticity (meaning “same variance”) is central to linear regression models.

✅ The correct answer is C.
An assumption of specification analysis, which states all values of residuals which are uniformly scattered around regression line is classified as normality of residuals. Residuals are the differences between the observed and predicted.