Cost Accounting Quiz

Which of the following best describes "allocation" in cost accounting?

• Dividing a cost among multiple cost centers based on a specific basis

• Assigning a cost directly to a single cost center or cost unit

• Distributing overhead costs using a pre-determined rate

• Apportioning joint costs among products

What is the main difference between allocation and apportionment of costs?

• • Allocation assigns costs directly, while apportionment shares costs among multiple cost centers.

• • Allocation uses a basis for distribution, while apportionment does not

• • Allocation is for overheads only, while apportionment is for direct costs

• • Allocation is less accurate than apportionment.

Which of the following bases is most appropriate for apportioning factory rent?

• • Direct labour hours used by each cost center

• • Number of employees in each cost center

• • Floor area occupied by each cost center

• • Machine hours used by each cost center

A company allocates the salary of a factory manager to a specific cost center. This is an example of:

• • Re-allocation

• • Apportionment

• • Absorption

• • Allocation

Allocation is the process of splitting joint costs among different cost centers.

• TRUE

• FALSE