Costing mcqs

✅ The correct answer is A.
Fourth step in development of operating budget is to choose alternatives. An operating budget is a forecast of the revenues and expenses expected for one or more future periods.

✅ The correct answer is A.
An estimation of relationship between one independent variable and dependent variable is known as simple regression. Simple linear regression is a statistical method that allows us to summarize and study relationships between two continuous (quantitative) variables.

✅ The correct answer is A.
Type of spoilage, which is considered as controllable and can be avoided is called abnormal spoilage. Abnormal spoilage is the amount of waste or destruction of inventory beyond what is expected in normal business processes.

✅ The correct answer is C.
A cost unit is a unit of production or service in relation to which costs are ascertained. A cost unit refers to the unit of quantity of product, service or time (or combination of these) in relation to which costs may be ascertained or expressed.

✅ The correct answer is C.
An amount of spoilage that is not natural in a specific production process is categorized as abnormal spoilage. Abnormal spoilage does not directly correspond to the number of units produced, and is considered an unexcepted surplus.

✅ The correct answer is A.
In an income statement, when costs become cost of sold goods and manufactured products are sold, such costs are inventoriable costs. Inventoriable costs are included in the cost of a product. For a manufacturer, these costs include direct materials, direct labor, freight in, and manufacturing overhead.

✅ The correct answer is A.
Direct material is a manufacturing cost. Direct material cost is the cost of the raw materials and components used to create a product.

✅ The correct answer is C.
Balancing of all aspects of products or services and all departments in company are classified as coordination. Coordination is the essence of management and an integral part of all the managerial functions.

✅ The correct answer is C.
Flexible budget amount = Operating income + static budget
= $68000 + $19000 = $87,000

✅ The correct answer is D.
If an allocated indirect cost is $1500 and actual incurred indirect cost is $1200, then this is classified as over allocated indirect cost because the allocated amount is less than actual amount.