Costing mcqs

✅ The correct answer is C.
Under allocated indirect cost = Actual indirect cost incur – Indirect cost allocated = $35000 – $43000 = -$8000

✅ The correct answer is B.
Type of relationship stating “how changes in cost driver drives cause changes in cost” will be termed as economic plausibility. There is a positive relationship between the number of service reports (a cost driver) and the customer- service department costs.

✅ The correct answer is A.
Significant feature of Kaizen Budgeting is employee suggestion. Kaizen budgeting takes the concept of continual improvement and applies it to budgets and budget forecasting.

✅ The correct answer is C.
Method of revenue allocation, which ranks products included in bundle according to predetermined criteria of management is known as incremental revenue allocation method. The ranking of the individual products in the suite determines the revenues allocated to them.

✅ The correct answer is B.
An estimation of relationship between two or more independent variables and dependent variable is classified as multiple regression. Multiple regression is an extension of simple linear regression. It is used when we want to predict the value of a variable based on the value of two or more other variables.

✅ The correct answer is C.
Third step in estimation of cost function, by using quantitative analysis is collection of data for dependent variable and cost driver.

✅ The correct answer is A.
Indirect materials can be apportioned on the basis of direct material. Indirect materials are materials used in the production process, but which cannot be linked to a specific product or job.

✅ The correct answer is A.
Cost analysis method, which uses mathematical method to use fit between past data observations and cost functions is termed as quantitative analysis method. Quantitative methods emphasize objective measurements and the statistical, mathematical, or numerical analysis of data collected through polls, questionnaires, and surveys, or by manipulating pre-existing statistical data using computational techniques.

✅ The correct answer is A.
Relevant ordering costs are added into relevant carrying costs to calculate relevant total costs. Relevant cost is a managerial accounting term that describes avoidable costs that are incurred when making business decisions.

✅ The correct answer is C.
The service departments render service (benefit) to the production departments. Service departments may exist to provide services of various kinds to other departments. For example, personnel, maintenance, boiler house, pump house, power generation departments are service departments which provide service to the production and other service centres.