Costing mcqs

✅ The correct answer is A.
Total indirect cost in pool by an actual quantity of cost allocation base is used to calculate actual manufacturing overhead rate. Costs that are outside of the manufacturing operations, such as marketing and general management, are expenses of the accounting period and are not applied or assigned to products.

✅ The correct answer is C.
Third step in constant gross margin percentage NRV Method to allocate joint cost is to compute allocated joint costs.

✅ The correct answer is B.
In normal costing, situation in which allocated amount of indirect cost is greater than incurred cost, is considered as over allocated indirect cost. Indirect costs are usually grouped into common pools and charged to benefiting objectives through an allocation process/indirect cost rate.

✅ The correct answer is C.

✅ The correct answer is A.
An estimated coefficient, which indicates degree by which estimated values are affected by random factors is known as standard error of estimated coefficient.

✅ The correct answer is B.
Coefficient of determination = Unexplained variation ÷ Total variation
= 456870 ÷ 955000 = 0.4783

✅ The correct answer is C.
Point in joint production process, in which two or more products are separately identifiable is termed as split off point. A split-off point is the location in a production process where jointly manufactured products are henceforth manufactured separately; thus, their costs can be identified individually after the split-off point.

✅ The correct answer is B.
Most frequently used methods of quantitative analysis include high low method. The high low method and regression analysis are the two main cost estimation methods used to estimate the amounts of fixed and variable costs.

✅ The correct answer is A.
Chances of cost to be considered as variable are more, if the time horizons are long. Time horizon is the length of time over which an investment is made or held before it is liquidated.

✅ The correct answer is D.
Variance, if used to alert managers before time of problem is called early warning.