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

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