WorksheetsHigher Accounting - Overheads
Total questions: 44
Worksheet time: 22mins
Insurance of vans
Administration costs
Canteen costs
Piece rate labour costs
Rent
Depreciation of machinery
Heat and Light
Supervision
Maintenance of machinery
Power costs
Cleaning
Administration
Canteen
Canteen
The technical name for the process of charging production overheads to cost units is called:-
Allocation
Cost of machinery
Absorption
Attrition
The term 'overhead incurred' refers to the amount actually paid out for overhead expenses such as electricity, rent and insurance.
If actual overheads incurred for the period are LESS than overheads absorbed, the business will have OVER absorbed.
If actual overheads incurred for the period are MORE than overheads absorbed, the business will have OVER absorbed.
Under or over recovery of overheads is recorded in the Statement of Financial Position.
True or False?
Which statement correctly outlines the impact of over absorption of overheads on profits?
Profits will be increased as it is more likely that the selling price charged to the customer will cover all the costs incurred by the business that year
Profits will be increased as it is less likely that the selling price charged to the customer will cover all the costs incurred by the business that year
Profits will be decreased as it is more likely that the selling price charged to the customer will cover all the costs incurred by the business that year
Profits will be decreased as it is less likely that the selling price charged to the customer will cover all the costs incurred by the business that year
Which statement correctly outlines the impact of under absorption of overheads on profits?
Profits will be increased as it is more likely that the selling price charged to the customer will cover all the costs incurred by the business that year
Profits will be increased as it is less likely that the selling price charged to the customer will cover all the costs incurred by the business that year
Profits will be decreased as it is more likely that the selling price charged to the customer will cover all the costs incurred by the business that year
Profits will be decreased as it is less likely that the selling price charged to the customer will cover all the costs incurred by the business that year
True or False? Apportionment of overheads takes place when the overhead cost can be identified with a particular department.
True
False
True or False? Apportionment of overheads takes place when the overhead cost cannot be identified with a particular department.
True
False
True or False? Allocation of overheads takes place when the overhead cost can be identified with a particular department or is unique to a department.
True
False
True or False? Allocation of overheads takes place when the overhead cost cannot be identified with a particular department or is common to all department.
True
False
True or False. In Apportionment, each department is charged with its share of the total overhead using an equitable basis.
True
False
True or False. In Allocation, each department is charged with its share of the total overhead using an equitable basis.
True
False
True or False. With Allocation of overheads, the department could be charged with the actual overheads it has incurred e.g. indirect materials or indirect labour
True
False
True or False. With Apportionment of overheads, the department could be charged with the actual overheads it has incurred e.g. indirect materials or indirect labour
True
False
What is correct formula for the overhead absorption rate (rate per) Units Produced?
Overhead Costs / Units Prroduced
Units Produced / Overhead Costs
Overhead Costs / Direct Material Costs x 100%
Direct Material Costs / Overhead Costs x 100%
Where can you find the £ amount for each type of overhead?
In the Statement of Financial Position (Non current assets Section)
In the Income Statement (Cost of Sales Section)
In the Income Statement (Expenses Section)
In the Income Statemetn (Before Prime Cost Section)
Which statement(s) are true about Factory Overheads? More than one statement may be correct!
Costs incurred in the factory which can be directly identified with the product being manufactured.
Example could be (Factory) Supervisor's Salary.
Factory Overheads can also be known as indirect costs.
The Overheads are totalled and then deducted from the Prime Cost in the Manufacturing Account.
Are time based rather than output based.
Which statements are correct when thinking about a Cost Centre?
any part of the business where production takes place
any part of the business where income can be charged
could be a department, item of equipment, machine or person
are used to collect overheads for charging on to products which use the cost centre
