Costing mcqs

✅ The correct answer is C.
Activities related to coordinating, controlling and planning flow of inventory are classified as inventory management. Inventory management refers to the process of ordering, storing, and using a company’s inventory. These include the management of raw materials, components, and finished products, as well as warehousing and processing such items.

✅ The correct answer is C.
Slope coefficient = Difference in costs ÷ Difference in machine hours

Difference in cost = Difference in machine hours × Slope coefficient
= 50000 × 0.60 = $30,000

✅ The correct answer is A.
As compared to cumulative average-time learning model, learning model which predicts more cumulative total time to produce more units is known as incremental unit time learning model.

✅ The correct answer is B.

✅ The correct answer is D.
Small residual terms and positive slope of line indicate directly proportion.

✅ The correct answer is D.
Third step in developing operating budget is making predictions about future. An operating budget is the annual budget of an activity stated in terms of Budget Classification Code, functional/subfunctional categories and cost accounts.

✅ The correct answer is A.
In production, variables such as level of activity or volume of company activity are known as cost drivers. A cost driver is the direct cause of a cost, and its effect is on the total cost incurred.

✅ The correct answer is C.
Overhead can be classified according to function-wise as manufacturing o/h, administration o/h and selling & distribution o/h.

✅ The correct answer is B.
When two products are simultaneously produced in a process and one of them has comparatively high value and other is of low value , the low value product is called by products.

✅ The correct answer is A.
An assumption of specification analysis states: any observation does not belong to any other observation’s residual value, is classified as independence of residuals. These residual plots can be used to assess the quality of the regression.