Top 50+ Solved Accounting of overheads (Part 2) MCQ Questions Answer
Q. Blanket overhead rates are not appropriate in the following circumstances.
a. There is more than one department
b. Jobs do not spend an equal amount of time in each department
c. Both A&B
d. None
Q. Administration overheads and sales and distribution overheads are not absorbed into product costs. Instead, they are treated in full as an expense in the financial period to which they relate.
a. The above statement is correct
b. The above statement is incorrect
c. none
d. none
Q. Non-production overhead costs are never added to the value of inventory.
a. False
b. True
c. none
d. none
Q. A predetermined overhead absorption rate is also known as:
a. Fixed overhead absorption rate
b. The fixed overhead recovery rate
c. The fixed overhead applied
d. All of the above
Q. If the amount of production overheads absorbed into product costs is more thanthe actual production overhead expenditure, there is:
a. Over-absorbed overhead
b. Under-absorbed overhead
c. Neither A or B
d. None
Q. The over-absorbed overhead is accounted for as an adjustment to the profit inthe period, and is added to profit in the cost accounting income statement.
a. Correct
b. Incorrect
c. none
d. none
Q. Identify the circumstances where under- or over-recovery of overhead will occur:
a. Actual overhead costs are different from budgeted overheads
b. The actual activity level is different from the budgeted activity level
c. Actual overhead costs and actual activity level differ from the budgeted costs and level
d. All of the above
Q. Variable overhead is overhead that increases as more production work is done.Total variable overhead expenditure therefore depends on the volume of production. Variable overhead is usually calculated as an amount for each direct labour hour worked.
a. The above statement is correct
b. The above statement is incorrect
c. none
d. none