Question

If the cost equation yields a coefficient of determination of 80%, it means that the: a. independent variable explains 20% of the variability in cost. b, dependent variable explains 20% of the variability in cost. c, dependent variable explains 80% of the variability in cost. d, independent variable explains 80% of the variability in cost

Answer 1

Answer = 1)
Answer = Option C = Dependent variable exlains 80% of the variability in cost
Answer = 2
CALCULATION OF THE COST PER UNIT AS PER ABSORPTION COSTING
Direct Materials	$                       75
Direct Labour	$                     150
Labour Overhead	$                       65
Fixed Overhead per unit	$                       40
Total Cost per unit	$                     330
X By	"X" By
Closing invenotry (15000 units - 12000 units )	$                 3,000	units
Ending invenotry value	$           9,90,000
Answer = Option A = $ 990,000
Answer = 3)
Step cost is a cost which are not change continiously , its cost behavious is like steps
Answer = Option B = Changes only if output changes in large quantities