Costing - Study Mode

[#326] What may be the principle budget factor in case of plant?
Correct Answer

(C) Insufficient capacity

[#327] Why are the estimated benefits from a project are expressed as cash flows instead of income flows?
Correct Answer

(A) It is cash, not accounting income, that is central to the firm's capital budgeting decision

[#328] In a given scenario, if cost is considered as indirect cost then independent variable will be considered as
Correct Answer

(C) cost allocation base

Explanation

Solution: In a given scenario, if cost is considered as indirect cost then independent variable will be considered as cost allocation base. An allocation base is the basis upon which an entity allocates its overhead costs.

[#329] Cost analysis method, which uses mathematical method to use fit between past data observations and cost functions is termed as
Correct Answer

(A) quantitative analysis method

Explanation

Solution: Cost analysis method, which uses mathematical method to use fit between past data observations and cost functions is termed as quantitative analysis method. Quantitative methods emphasize objective measurements and the statistical, mathematical, or numerical analysis of data collected through polls, questionnaires, and surveys, or by manipulating pre-existing statistical data using computational techniques.

[#330] Third step in estimation of cost function, by using quantitative analysis is collection of data for
Correct Answer

(C) dependent variable and cost driver

Explanation

Solution: Third step in estimation of cost function, by using quantitative analysis is collection of data for dependent variable and cost driver.