phan 3

Which of the following describes a cost centre?

• Units of a product or service for which costs are ascertained

• Amounts of expenditure attributable to various activities

• Functions or locations for which costs are ascertained and related to cost units for control purposes

• A section of an organisation for which budgets are prepared and control is exercised

Which of the following is a valid reason for calculating overhead absorption rates?

• To reduce the total overhead expenditure below a predetermined level

• To ensure that the total overhead expenditure does not exceed budgeted levels

• To attribute overhead costs to cost units

• To attribute overhead costs to cost centres

Which of the following is known as spreading common costs over cost centres on the basis of benefit received?

• Overhead absorption

• Overhead apportionment

• Overhead allocation

• Overhead analysis

The process of overhead apportionment is carried out so that

• costs may be controlled

• cost units gather overheads as they pass through cost centres

• whole items of cost can be charged to cost centres

• common costs are shared among cost centres

After reapportionment of the service cost centre costs, what will be the overhead cost of the machining department cost centre?

• £3,300

• £17,750

• £18,000

• £18,300

How would their salaries be dealt with when calculating a fixed overhead absorption rate for the factory?

• Allocated to factory

• Apportioned to factory

• Allocated to factory

• Apportioned to factory

After the re-apportionment, the total overhead cost of the packing department, to the nearest £, will be

• £1,200

• £9,968

• £10,080

• £10,160

Which three of the following statements on the determination of overhead absorption rates are correct?

• Costs can be allocated where it is possible to identify which department caused them.

• Supervisors' salaries are likely to be apportioned rather than allocated.

• Costs need to be apportioned where they are shared by more than one department.

• There is no need for a single product company to allocate and apportion overheads in order to determine overhead cost per unit.

• Apportionment always produces the correct result.

Which of the following bases of apportionment would be most appropriate for apportioning heating costs to production cost centres?

• Floor space occupied in square metres

• Volume of space occupied in cubic metres

• Number of employees

• Labour hours worked

What is the fixed overhead cost absorbed by a unit of Product B?

• £30.00

• £5.00

• £7.20

• £1.20