Nonlinearity and Cost Functions Quiz with Answers PDF Download – Test 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