Nonlinearity and Cost Functions Quiz Questions and Answers PDF - 77

MCQ 381: The cost function, in which the graph of total cost would not result in straight line is classified as

1. nonlinear cost function
2. linear cost function
3. linear price function
4. nonlinear price function

MCQ 382: An assumption, which states that there must be linear relationship between independent variable and dependent variable is

1. irrelevant range of linearity
2. relevant range of linearity
3. significant range
4. insignificant range

MCQ 383: If the flexible budget variance is $95000 and an actual cost is $40000, then the flexible budget cost would be

1. $135,000
2. $45,000
3. $50,000
4. $55,000

MCQ 384: The vertical difference, which measures distance between estimated and actual cost for every single observation is classified as

1. residual term
2. positive term
3. negative term
4. squared term

MCQ 385: The practice, which makes target more achievable by underestimating revenues or overestimating cost is called

1. cost slack
2. target slack
3. budgetary slack
4. revenue slack