Overhead allocation, apportionment and absorption

Overhead allocation, apportionment and absorption

University

8 Qs

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Overhead allocation, apportionment and absorption

Overhead allocation, apportionment and absorption

Assessment

Quiz

Other

University

Medium

Created by

Kathryn Wyre

Used 2+ times

FREE Resource

8 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

When allocating overhead costs, which basis would be most appropriate for the canteen costs?
Number of employees
Machine hours
Direct labour hours
Floor area

2.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

What is the primary purpose of absorption costing?
To attribute all overheads to products
To allocate only variable costs to products
To determine the break-even point
To calculate the contribution margin

3.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The overhead absorption rate for a manufacturing business that makes widgets can be calculated using which of the following formulas?

Total overheads / Direct materials
Total overheads / Machine hours
Total overheads / Number of units
Total overheads / Total direct costs

4.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following bases would be most suitable for apportioning rent expenses in a factory?
Number of employees
Direct labour hours
Floor area
Machine hours

5.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

In cost accounting, overhead absorption is primarily aimed at achieving which of the following?
Accurate cost control
Allocation of costs to departments
Equitable distribution of costs to products
Identification of non-value-added activities

6.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following is a disadvantage of using a single overhead absorption rate for a multi-product company?
It simplifies the costing process
It may lead to over or under absorption of overheads
It is easier to apply
It ensures accuracy in product costing

7.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

When overheads are under-absorbed, which of the following is true?
The overhead absorption rate was too high
Actual overheads were less than absorbed overheads
Absorbed overheads were less than actual overheads
There is no impact on profit

8.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following would be an appropriate basis for apportioning supervisory salaries in a production department?
Direct labour hours
Machine hours
Units produced
Floor area