Top 150+ Solved Cost and Works Accounting 2 MCQ Questions Answer
Q. Which of the following procedure is incorrect for attributing overhead costs to cost units?I. Collecting production overhead costs by item II. Establishing cost centres III. Allocating and apportioning overhead costs to cost centres IV. Apportioning service cost centre costs to production cost centres V. Absorbing production cost centre costs into cost units
a. All of the above are correct
b. All of the above are incorrect
c. (II) and (IV) are incorrect
d. (II) is incorrect
Q. . The total amount of factory overhead represents:
a. Allocated costs
b. Apportioned costs
c. Share of service department costs
d. All of the above
Q. When overheads have been allocated and apportioned to production cost centres, they are charged to the cost of products manufactured in the cost centre.
a. The above statement is correct
b. The above statement is incorrect
c. none
d. none
Q. Production overheads are the overhead costs of both the production departmentsand the service departments.
a. False
b. True
c. none
d. none
Q. Sharing the costs of the service centres between the production centres is called:
a. Reapportionment
b. Reallocation
c. Secondary apportionment
d. None
Q. The total overhead costs of each production centre should be:
a. Costs allocated directly to the production centre
b. Shared costs apportioned to the production centre
c. A share of the costs of each service department, apportioned to the production centre
d. All of the above
Q. The absorption rate may be calculated by the fraction:• Total overhead costs • Total of absorption basis.
a. Correct
b. Incorrect
c. none
d. none
Q. Overheads can be absorbed into cost units by means of:• Physical unit produced • Percentage of prime cost • Percentage of direct wages • Direct labour hour rate • Machine hour rate
a. All of the above
b. (I) (IV) and (V) only
c. (IV) and (V) only
d. None
Q. The purpose of allocation and apportionment of overheads is to calculate an absorption rate for each production department.
a. False
b. True
c. none
d. none
Q. Absorption rates are used to add overhead costs to:
a. The Admin costs
b. Other expenses
c. The costs of production
d. None
Q. A situation may arise where both service departments do work for the other service department, as well as the production departments. The secondary apportionment is more complex. The process is called reciprocal apportionment
a. The above statement is correct
b. The above statement is incorrect
c. none
d. none