Identify the circumstances where under- or over-recovery of overhead will occur:

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
• Blanket overhead rates are not appropriate in the following circumstances.
• 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.
• Process costing provides a system of costing where the following characteristics occur. Identify which of the following are correct:
• Under or over absorption is caused by the actual fixed overhead and production volume being different from those figures used to calculate the predetermined rate.
• An example of a production overhead would be:
• Which of the following cost is also known as overhead cost or on cost:
• The overhead cost for a particular job =