Overheads in Costing MCQ with Answers | Cost Accounting MCQs (Free Resource)

Overheads in Costing MCQ with Answers

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1. Indirect cost is known as ________ .
a) Indirect overheads
b) overheads
c) Work overheads
d) Chargeable overheads

2. Cost incurred to secure orders is ____________.
a) selling overheads
b) Office overheads
c) Variable overheads
d) None of the above

3. Material which cannot be charged directly ___________ .
a) Direct material
b) indirect material
c) overheads
d) None of the above

4. Rent of building is ____________ overheads.
a) fixed overhead
b) Indirect overheads
c) Direct overheads
d) None of the above

5. Cost which can be controlled is ___________ cost.
a) chargeable
b) controllable
c) overheads
d) None of the above

6. Cost of abnormal idle time is ____________ overheads.
a) abnormal
b) normal
c) Production
d) None of the above

7. Depreciation on machinery is charged under ___________ overheads.
a) factory overheads
b) Office overheads
c) Direct overheads
d) Indirect overheads

8. Royalty on production is a __________ charge.
a) direct
b) Indirect
c) overheads
d) None of the above

9. Costing department expenses are considered as __________ overheads.
a) administrative overheads
b) Production overheads
c) Office overheads
d) Selling overheads

10) Stationery in production dept is ___________ material.
a) Indirect
b) Direct
c) Fixed
d) None of the above

Answers: 1)overheads 2) selling overheads 3) indirect material 4) fixed overhead 5) controllable 6) abnormal 7) factory overheads 8) direct 9) administrative overheads 10) Indirect

11. Salary of office clerk is ___________ labour.
a) Office
b) Indirect
c) Direct
d) Factory

12. Rent is ________ expense.
a) Fixed
b) Direct
c) Indirect
d) None of the above

13. Overheads are classified on the basis of behaviour as __________ .
a) Fixed, Variable, Semi-variable
b) Direct
c) Indirect
d) None of the above

14. Overheads are classified on the basis of function as ___________ .
a) Factory, Office & S & D
b) Purchase, Sales, Labour
c) Production, Material , Overhead
d) None of the above

15. Cost of catelogues is _________ .
a) Direct material
b) Indirect Material
c) Work cost
d) None of the above

16. Rent of premises is _____________ overheads.
a) Fixed
b) Direct
c) Indirect
d) None of the above

17. Telephone charges is __________ overheads.
a) fixed overhead
b) Variable overheads
c) Semi-Variable
d) None of the above

18. Actual benefit received by the department is _________ of apportionment of overheads.
a) No of employees
b) Principle
c) None of the above

19. Compensation to workers is apportioned on the basis of _____________ .
a) Overheads
b) Wages
c) Materials
d) None of the above

20. Store keeping expenses are apportioned on the basis of __________ material.
a) Direct
b) Indirect
c) Variable
d) None of the above

Answers: 11) Indirect 12) Fixed 13) Fixed, Variable, Semi-variable 14) Factory, Office & S & D 15) Indirect Material 16) Fixed 17) Semi-Variable 18) Principle 19) Wages 20) Indirect

21. Indirect costs cannot be identified with a particular cost centre are shared between cost centre using _____
a) a method of apportionment
b) a method of allocation
c) a recovery rate
d) None of the above

22. The method of apportionment suitable for allocating rent of building between cost centres ________
a) number of employees
b) machine hours
c) KWH
d) floor area

23. The allotment of whole items of cost to cost unit is called ________
a) cost allocation
b) cost apportionment
c) cost classification
d) overhead absorption

24. Administrative overheads are recovered as a percentage of __________
a) direct materials
b) prime cost
c) works cost
d) None of the above

25. Selling and distribution overheads are absorbed on the basis of ________
a) rate per unit
b) percentage on works cost
c) percentage on selling price
d) any of these

26. Depreciation on a machine is apportioned on the basis of _______
a) machine cost
b) machine hours
c) labour hours
d) labour cost

27. Power is allocated on the basis of _______
a) H.P. of machines
b) cost of machines
c) machine hours of machine
d) labour hours

28. Employee welfare expenses are allocated on the basis of ________
a) number of employees
b) labour hours
c) machine hours
d) prime cost

29. Electricity charges are allocated on the basis of _________
a) number of light points
b) cost of machines
c) labour hours
d) factory cost

30. Charging overheads to individual units is known as :
a) allocation
b) apportionment
c) absorption
d) collection

Answer: 21) a method of apportionment 22) floor area 23) cost allocation 24) works cost 25) any of these 26) machine cost 27) H.P. of machines 28) number of employees 29) number of light points 30) absorption

31. Direct expenses are also known as :
a) Chargeable expenses
b) Prime cost
c) Variable cost
d) Period cost

32. The process of arranging items into groups according to their degree of similarity is called :
a) Classification
b) Analysis
c) Identification
d) Ascertainment

33. The cost directly attributable to a department is called as :
a) Allotment
b) Allocation
c) Recovery
d) Charging

34. The process of redistribution of overheads of support department to production department is called as :
a) Secondary distribution
b) primary distribution
c) Repeat distribution
d) none of the above

35. Total of indirect material, indirect labour and indirect expenses is called as :
a) indirect overheads
b) Overheads cost
c) works overheads
d) Chargeable cost

36. The process of charging the traceable overheads to cost centres is called as :
a) Overheads allocation
b) Overheads charging
c) Overheads allotment
d) None of the above

37. Research cost should be treated as :
a) Production overheads
b) Period cost
c) Variable cost
d) None of the above

38. Storekeeping expenses are allocated on the basis :
a) No. of material requisitions
b) Area
c) Direct labour hours
d) None of the above

39. Salary of works manager is a :
a) Office overheads
b) Factory overheads
c) Selling overheads
d) All of the above

40. Assigning code numbers to a group of overheads is called as :
a) Classification
b) Codification
c) Analysis
d) None of the above

Answer: 31) Chargeable expenses 32) Classification 33) Allocation 34) Secondary distribution 35) Overheads cost 36) Overheads allocation 37) Production overheads 38) No. of material requisitions 39) Factory overheads 40) Codification

41. The process of charging cost to a cost unit is ____________ .
a) Absorption
b) Allocation
c) Apportionment
d) Allotment

42. Labour hour rate is followed in _________ intensive industry.
a) Labour
b) Machine
c) Different groups of machine
d) None of the above

43. Machine hour rate is followed in__________ intensive industry.
a) Machine
b) Labour
c) Different groups of machine
d) None of the above

44. Recovery of overheads in costing less than actual is __________ of overheads.
a) Under Absorption
b) Over Absorption
c) Application
d) None of the above

45. Recovery of overheads in costing more than actual is __________ of overheads.
a) Over Absorption
b) Under Absorption
c) Application
d) None of the above

46. Factory overheads are recovered as a % of_________ wages.
a) Direct Wages
b) Indirect Wages
c) None of the above

47. Office overheads are recovered as a % of ________ cost.
a) Factory Cost
b) Variable cost
c) Production cost
d) None of the above

48. Labour hour rate = _________ .
a) Overheads, Labour Hours
b) Overheads, Machine Hours
c) Direct Labour, Machine Hours
d) None of the above

49. Machine hour rate = __________ .
a) Overheads, Machine hours
b) Direct Materials, Machine Hours
c) Direct Labour, Machine Hours
d) None of the above

50. Depreciation of machine is __________ expense.
a) Power
b) Salary
c) Machine
d) None of the above

Answer: 41) Absorption 42) Labour 43) Machine 44) Under Absorption 45) Over Absorption 46) Direct Wages 47) Factory Cost 48) Overheads, Labour Hours 49) Overheads, Machine hours 50) Machine

51. Repairs and maintenance is ___________ expense.
a) Direct
b) Indirect
c) Machine
d) Selling

52. Production overhead rate is suitable when output is___________.
a) Uniform
b) Fluctuate
c) Constant
d) None of the above

53. % of direct material cost is suitable when material prices do not ________ much.
a) Fluctuate
b) Constant
c) Uniform
d) None of the above

54. % of Direct wages is suitable when direct __________ is major factor of production.
a) Labour
b) Machine
c) Wages
d) None of the above

55. Direct labour hour rate is suitable when labour is __________ factor of produciton.
a) Dominant
b) Major
c) Fluctuate
d) None of the above

56. Machine hour rate is suitable when machine is a _________ factor of production.
a) Fluctuate
b) Dominant
c) Major
d) None of the above

57. Rent is a_________ charge.
a) Standing
b) Dominant
c) Fluctuate
d) None of the above

58. Insurance is a _______ charge.
a) Dominant
b) Fluctuate
c) Standing
d) None of the above

59. Power is a ___________ expense.
a) Machine
b) Labour
c) Office
d) None of the above

60. Lubricating oil is a _________ expense.
a) Machine
b) Direct
c) Indirect
d) Labour

Answer: 51) Machine 52) Uniform 53) Fluctuate 54) Labour 55) Dominant 56) Dominant 57) Standing 58) Standing 59) Machine 60) Machine

61. Machine hour rate takes into account _________.
a) Time Fact
b) Cost Fact
c) Place Fact
d) None of the above

62. The process by which cost items are charged directly to a cost unit is called _______.
a) absorption
b) apportionment
c) allocation
d) allotment

63. A common absorption rate used through out the following for all jobs and units of output irrespective of the department in which they were produced is called _________
a) machine hour rate
b) department absorption rate
c) overall absorption rate
d) blanket absorption rate

64. When allocating service department costs to production departments, the method that does not consider different cost behaviour pattern is the _________
a) step method
b) reciprocal method
c) simple rate method
d) dual rate method

65. Machine hour rate is followed when ______
a) most of the work is done by machine
b) most of the work is done by labour
c) overall absorption rate
d) blanket absorption rate

66. Labour hour rate is followed when most of the work is done by _______
a) labour
b) machines
c) different groups of machines
d) None of the above

67. When overheads recovered in costing are less than actual overheads incurred it is called :
a) under absorption
b) over absorption
c) recovery
d) none of the above

68. When overheads recovered in costing are more than actual overheads incurred it is called :
a) under absorption
b) over absorption
c) application
d) all of the above

69. Factory overheads are recovered as a :
a) % of Direct wages
b) % of cost of production
c) % of sales
d) None of the above

70. Office overheads are recovered as a % of :
a) Direct materials
b) Direct wages
c) Factory cost
d) None of the above

Answer: 61) Time fact 62) allocation 63) blanket absorption rate 64) simple rate method 65) most of the work is done by machine 66) labour 67) under absorption 68) over absorption 69) % of Direct wages 70)Factory cost

71. Insurance is apportioned on machines on the basis of :
a) Insured value of each machine
b) Invoice price of each machine
c) Area
d) Cost of machine

72. Machine expenses are :
a) Depreciation on machine
b) Rent of premises
c) Salary of supervisors
d) All of the above