FACTORY OVERHEAD (GROUP 1)

Which of the following best describes a mixed cost?

• A cost that remains constant regardless of activity level.

• A cost that varies directly with activity level.

• A cost that contains both fixed and variable components.

• A cost that is irrelevant for decision-making.

The predetermined overhead overhead rate is calculated by:

• Dividing actual overhead costs by actual activity level

• Dividing budgeted overhead costs by budgeted activity level

• Multiplying budgeted overhead costs by budgeted activity level

• Subtracting budgeted overhead costs from actual overhead costs.

Under-applied overhead means:

• Actual overhead costs are less than applied overhead costs

• Actual overhead costs are greater than applied overhead costs.

• The predetermined overhead rate was too high.

• The predetermined overhead rate was too low.

What is the purpose of a factory overhead budget?

• To track actual overhead costs.

• To estimate future overhead costs.

• To allocate overhead costs to individual products.

• To calculate variances

Which of the following is NOT a common method for allocating service department costs.

• Direct Materials

• Step-down allocation

• Reciprocal Allocation

• Random Allocation

What is the primary difference between a plant-wide overhead rate and a departmental overhead rate?

• The plant-wide is more accurate.

• The departmental rate is simpler to calculate.

• The departmental rate uses separate rates for each department.

• The plant-wide rate only considers variable overhead costs.

activity based costing or abc is particularly useful when

• products are very similar

• overhead cost are insignificant

• products consumed

  resources in different proportions

• a simple costing system is desired

a company using non controlling account system for factory overhead will

• maintain a single overhead control account

• maintain separate accounts for each type of overhead costs

• not truck overhead cost

• only track variable overhead cost s

which term describes a cost that remain constant within a relevant range, regardless of production volume

• variable cost

• mixed cost

• fixed costs

• direct costs

the method of allocating overhead cost based on the activities that drive those cost is called:

• absorption costing

• direct costing

• activity based costing or abc

• normal costing