Costing - Study Mode

[#146] Examples of nonlinear cost functions are
Correct Answer

(B) step cost functions

Explanation

Solution: Examples of nonlinear cost functions are step cost functions. The NCF represents a nonlinear multivariate functional of state variables.

[#147] Relationship between cost and cost driver is economically plausible if goodness of fit
Correct Answer

(A) has meaning

Explanation

Solution: Relationship between cost and cost driver is economically plausible if goodness of fit has meaning. The goodness of fit test is a statistical hypothesis test to see how well sample data fit a distribution from a population with a normal distribution. In other words, it tells you if your sample data represents the data you would expect to find in the actual population.

[#148] Situation in which two or more independent variables are highly correlated is known as
Correct Answer

(D) multi-collinearity

Explanation

Solution: Situation in which two or more independent variables are highly correlated is known as multi-collinearity. Multicollinearity is the occurrence of high intercorrelations among independent variables in a multiple regression model.

[#149] First step in estimation of cost function by using quantitative analysis is to
Correct Answer

(B) choose dependent variable

Explanation

Solution: First step in estimation of cost function by using quantitative analysis is to choose dependent variable. A dependent variable is what you measure in the experiment and what is affected during the experiment. The dependent variable responds to the independent variable. It is called dependent because it "depends" on the independent variable.

[#150] Merricks multiple piece rate system has _______.
Correct Answer

(B) three rates

Explanation

Solution: Merricks multiple piece rate system has three rates. According to this plan, three piece rates for a job is fixed. None of these three piece rates are fixed below the normal level. These three rates are applied in the manner given below:
Rates Bonus Incentive
1. Upto 83 '/3% Normal Rate
2. Above 83 1/3 % to 100% 110% of Normal Rate
3. Above 110% 120% of Normal Rate