Blanket overhead rates are not appropriate in the following circumstances.

Related MCQs

• Variable overhead is overhead that increases as more production work is done. Total variable overhead expenditure therefore depends on the volume of production. Variable overhead is usually calculated as an amount for each direct labour hour worked.
• Which of the following procedure is incorrect for attributing overhead costs to cost units? I. Collecting production overhead costs by item II. Establishing cost centres III. Allocating and apportioning overhead costs to cost centres IV. Apportioning service cost centre costs to production cost centres V. Absorbing production cost centre costs into cost units
• A blanket overhead absorption rate is an absorption rate used throughout a factory and for all jobs and units of output irrespective of the department in which they were produced.
• Identify the circumstances where under- or over-recovery of overhead will occur:
• Overhead absorption is the process whereby overhead costs allocated and apportioned to production cost centres are added to unit, job or batch costs.
• Overhead absorption is sometimes called overhead recovery.
• Absorption rates are used to add overhead costs to:
• What would be the effect of inaccurate estimation of overhead absorption rates on a Job?
• Which of the following cost is also known as overhead cost or on cost:
• . Which of the following is most likely to be an allocated production overhead cost to the finishing cost centre?