Costing - Study Mode

[#266] Significant non-cash transactions are included in
Correct Answer

(D) None of the above

[#267] The budget relating to . . . . . . . . must be prepared first and the other budgets should be prepared in the light of that factor.
Correct Answer

(A) limiting factor

[#268] Strength of relationship between cost driver and cost is considered as
Correct Answer

(D) goodness of fit

Explanation

Solution: Strength of relationship between cost driver and cost is considered as goodness of fit. Goodness of fit measures the degree of association between cost and activity.

[#269] In regression equation Y = $6000 + (per unit cost x number of units), '$6000' is a
Correct Answer

(A) constant

[#270] In linear cost function, fixed cost is considered as
Correct Answer

(A) constant

Explanation

Solution: In linear cost function, fixed cost is considered as constant. Fixed costs refer to costs that do not vary with production volume. They remain relatively constant regardless of the company's level of production or business activity.