Chapter Questions
State whether the following statements are true or false:When actual overheads are more than absorbed overheads, it is known as overabsorption.
Choose the Correct Answer:Aggregate of indirect materials, labour and expenses is termed as(a) income(b) overhead(c) expenses(d) $\operatorname{tax}$
State whether the following statements are true or false:A blanket overhead rate is a single overhead rate computed for the entire factory.
Choose the Correct Answer:The allotment of whole items of cost to cost centres or cost units is known as(a) allocation(b) absorption(c) measurement(d) apportionment
State whether the following statements are true or false: MHR is separately computed for each machine.
Choose the Correct Answer:Wages of machine operator is included in(a) ordinary MHR(b) depreciation(c) plant(d) comprehensive MHR
State whether the following statements are true or false: Underabsorption of overhead results in understatement of cost.
Choose the Correct Answer:When the amount of overhead absorbed is less than the amount of overhead incurred, it is known as(a) underabsorption of overhead(b) overabsorption of overhead(c) proper absorption of overhead(d) none of these
State whether the following statements are true or false:Underabsorption of overheads means that actual overheads are more than absorbed overheads.
Choose the Correct Answer:The difference between the practical capacity and the capacity based on sales expectancy is termed as(a) idle capacity(b) ideal capacity(c) return capacity(d) ordinary capacity
State whether the following statements are true or false: Basis of apportionment of store's service expenses is the value of the material consumed.
Choose the Correct Answer:Allotment of proportions of items of cost to cost centres or cost units is known as(a) allocation(b) absorption(c) measurement(d) apportionment
State whether the following statements are true or false:Basis of apportionment of welfare department expenses is the number of employees.
Choose the Correct Answer:Which of the following is usually classified as stepped cost?(a) telephone(b) raw materials(c) rates(d) supervisor's wages
State whether the following statements are true or false:Basis of apportionment of Crèche expense is the number of male employees.
Choose the Correct Answer: Factory overheads include all of the following except(a) salary of plant manager(b) depreciation on delivery department(c) small tool expenses(d) taxes on factory building
State whether the following statements are true or false:Rent is apportioned based on the floor area.
Choose the Correct Answer:MHR is computed for(a) factory(b) all the machines(c) each machine(d) computers
State whether the following statements are true or false:For calculating depreciation, scrap value is irrelevant.
Choose the Correct Answer:The process of grouping costs according to their common characteristics is called(a) cost allocation(b) cost apportionment(c) cost department(d) cost classification