Costing - Study Mode
[#861] Which one of following is main advantage of quantitative method?
Correct Answer
(C) objective
Explanation
Solution: Objective is main advantage of quantitative method. Generally, quantitative methods are designed to provide summaries of data that support generalisations about the phenomenon under study.
[#862] An implementation of activity based costing would be possible only if accountants find
Correct Answer
(C) cost driver for each activity
Explanation
Solution: An implementation of activity based costing would be possible only if accountants find cost driver for each activity. A cost driver is the unit of an activity that causes the change in activity's cost. cost driver is any factor which causes a change in the cost of an activity.
[#863] In assumptions testing, violation of constant variance is called
Correct Answer
(A) heteroscedasticity
Explanation
Solution: In assumptions testing, violation of constant variance is called heteroscedasticity. Heteroscedasticity means unequal scatter. In regression analysis, we talk about heteroscedasticity in the context of the residuals or error term. Specifically, heteroscedasticity is a systematic change in the spread of the residuals over the range of measured values.
[#864] In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through
Correct Answer
(A) price index
Explanation
Solution: In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through price index. A price index is a normalized average (typically a weighted average) of price relatives for a given class of goods or services in a given region, during a given interval of time.
[#865] Weak relationship between cost and cost driver is indicated on a regression line, which is
Correct Answer
(B) slightly sloped
Explanation
Solution: Weak relationship between cost and cost driver is indicated on a regression line, which is slightly sloped.