Costing - Study Mode

[#566] In plotting cost functions, number of machine hours and batches are represented on
Correct Answer

(D) y-axis

Explanation

Solution: In plotting cost functions, number of machine hours and batches are represented on y-axis.

[#567] An error term, disturbance term or residual term is calculated as
Correct Answer

(C) u=Y-y

Explanation

Solution: An error term, disturbance term or residual term is calculated as u=Y-y.

[#568] Cost function, in which graph of total cost would not result in straight line is classified as
Correct Answer

(A) nonlinear cost function

Explanation

Solution: Cost function, in which graph of total cost would not result in straight line is classified as nonlinear cost function. A nonlinear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is not a straight line.

[#569] An assumption, which states that there must be linear relationship between independent variable and dependent variable is
Correct Answer

(B) relevant range of linearity

Explanation

Solution: An assumption, which states that there must be linear relationship between independent variable and dependent variable is relevant range of linearity.

[#570] Vertical difference, which measures distance between estimated and actual cost for every single observation is classified as
Correct Answer

(A) residual term

Explanation

Solution: Vertical difference, which measures distance between estimated and actual cost for every single observation is classified as residual term.