Costing mcqs

✅ The correct answer is A.
Time wages are paid on the basis of actual time. In this system of wage payment, the workers are paid the wages on the basis of time as, per hour, per day, per week, per fortnight or per month etc. This system does not consider the production of the employees during this time.

✅ The correct answer is B.

✅ The correct answer is B.
Cost control is a preventive function because it ascertains the cost before its occurrence.

✅ The correct answer is B.
In regression analysis, if observed cost value is 50 and predicted cost value is 7, then disturbance term will be 43.
Disturbance term = Observed cost value – Predicted cost value
= 50 – 7 = 43.

✅ The correct answer is A.
Relationship between cost and cost driver is economically plausible if goodness of fit has meaning. The goodness of fit test is a statistical hypothesis test to see how well sample data fit a distribution from a population with a normal distribution. In other words, it tells you if your sample data represents the data you would expect to find in the actual population.

✅ The correct answer is B.
Lower level of production leads to lower repair cost.

✅ The correct answer is D.
Observed cost value = Predicted cost value + Residual error
= 50 + 25 = 75

✅ The correct answer is B.
The term cost refers to the value of sacrifice made to acquire goods or services. The price of product sold or services rendered.

✅ The correct answer is A.
Selling price variance = Actual result × Actual units sold
= $250 × 350 = $87,500

✅ The correct answer is D.
A concept used to define learning curve in broader application is called experience curve. Experience curve refers to a diagrammatic representation of the inverse relationship between the total value-added costs of a product and the company experience in manufacturing and marketing it.