Chapter: Overheads
1.

An example of a production overhead would be:

A. Material.
B. Rent
C. Labour cost.
D. Supervisory cost
Answer» D. Supervisory cost
2.

All such expenses which are incurred for creating and enhancing the demands for the products are

A. Selling expenses
B. Administrative expenses
C. Distribution expenses
D. All of the above
Answer» D. All of the above
3.

To control costs it is essential to keep control on

A. Prime cost
B. Overheads
C. Indirect materials and tools cost.
D. All of the above
Answer» B. Overheads
4.

A cost that is easily traceable to a cost object is known as:

A. Direct cost
B. Indirect cost
C. Variable cost
D. Fixed cost
Answer» A. Direct cost
5.

Which of the following best describes a fixed cost? A cost which:

A. Represents a fixed proportion of total costs
B. Remains at the same level up to a particular level of output
C. Has a direct relationship with output.
D. Remains at the same level when output increases.
Answer» A. Represents a fixed proportion of total costs
6.

Which of the following is a valid classification of the salary paid to the foreman in charge of the packing department?

A. Indirect departmental cost
B. Direct product cost
C. Direct departmental cost
D. Service department cost.
Answer» D. Service department cost.
7.

A cost that changes in total dollar amount with the change in the level of activity is known as:

A. Direct cost
B. Indirect cost
C. Variable cost
D. Fixed cost
Answer» C. Variable cost
8.

Which of the following costs is treated as indirect labour?

A. Idle time
B. Overtime premium
C. Fringe benefits
D. All of the above
Answer» D. All of the above
9.

Which definition best describes indirect costs?

A. Indirect costs are those costs which are not controlled directly by a manager.
B. Indirect costs are those costs which cannot be directly associated with a product or service.
C. Indirect costs are always fix
Answer» B. Indirect costs are those costs which cannot be directly associated with a product or service.
10.

What would be the most appropriate way of apportioning depreciation costs across different manufacturing departments in a business?

A. Floor space
B. Numbers of personnel
C. Value of buildings and equipment
D. Administration costs
Answer» C. Value of buildings and equipment
11.

Which of the following cost is also known as overhead cost or on cost:

A. Cost of direct labour
B. Cost of direct material
C. Direct expenses
D. Indirect expenses
Answer» D. Indirect expenses
12.

Which of the following calculate the actual cost of product:

A. Cost estimation
B. Costing
C. Both a and b
D. None of these
Answer» D. None of these
13.

Costing is specialized branch of accounting which deals with:

A. Classification, recording, allocation, and control of asset
B. Classification, processing, allocation and directing
C. Classification, recording, planning and control of asset
D. Classification, recording, allocation and directing
Answer» D. Classification, recording, allocation and directing
14.

In cinema halls, composite cost unit is ________________:

A. A seat per show
B. Cost of screening
C. Salary of staff
D. Rent of cinema hall
Answer» A. A seat per show
15.

The stage of production at which separate products are identified is known as _______________:

A. Process costing
B. Reverse cost method
C. Subsequent cost
D. Equivalent production
Answer» A. Process costing
16.

What item is not included in cost accounting?

A. Product costing
B. Profit-sharing
C. Planning
D. Controlling
Answer» B. Profit-sharing
17.

A total of all the direct costs is known as

A. Cost of production
B. Cost of sales
C. Prime cost
D. Works cost
Answer» C. Prime cost
18.

Which of the following is not included in functional classification of overheads?

A. Repairs and maintenance
B. Lubricating oil
C. Consumable stores
D. Chargeable expenses
Answer» D. Chargeable expenses
19.

The process of distribution of overheads allotted to a particular department or cost center over the units produced is called:

A. Allocation
B. Apportionment
C. Absorption
D. Departmentalization
Answer» C. Absorption
20.

A product with a high gross profit could be an unprofitable product.

A. True
B. False
C. none
D. none
Answer» B. False
21.

To control costs it is essential to keep control on

A. Prime cost
B. Overheads
C. Indirect materials and tools cost
D. All of the above
Answer» D. All of the above
22.

The overhead cost for a particular job =

A. man hour rate x man hours spent on that job
B. man hour rate / man hours spent on that job
C. man hour rate + man hours spent on that job
D. man hour rate – man hours spent on that jab
Answer» A. man hour rate x man hours spent on that job
23.

The following method is an improvement over the percentage on direct labour cost method.

A. Machine hour rate
B. Percentage on prime cost
C. Percentage on direct material cost
D. Man hour rate
Answer» D. Man hour rate
24.

Which of the following is/are the basic object/s of job analysis?

A. Determination of wage rates
B. Ascertain the relative worth of each job
C. Breaking up job into its basic elements
D. All of the given options
Answer» A. Determination of wage rates
25.

An overhead absorption rate is used to:

A. Share out common costs over benefiting cost canters
B. Find the total overheads for a cost centre
C. Charge overheads to products
D. Control overheads
Answer» C. Charge overheads to products
26.

Economic Batch Quantity depends on ……………….and ……………..costs.

A. Material, labour
B. set-up costs, carrying
C. transportation, carrying
D. warehousing, labour
Answer» B. set-up costs, carrying
27.

The wages paid to maintenance department workers who do repair work principally for production departments but also on the vehicles in the distribution department should be charged as

A. Service cost
B. Distribution cost
C. General cost
D. Production cost
Answer» A. Service cost
28.

Which of the following costs of management is likely to have least control?

A. Machine breakdown cost
B. Wages cost
C. Advertising cost.
D. Buildings insurance cost
Answer» A. Machine breakdown cost
29.

Which of the following best describes a fixed cost? A cost which:

A. Represents a fixed proportion of total costs.
B. Remains at the same level up to a particular level of output.
C. Remains at the same level when output increases
D. Has a direct relationship with output
Answer» B. Remains at the same level up to a particular level of output.
30.

Which of the following would not be considered as a component of 'cost' of stock?

A. Transportation inward cot
B. Import duties
C. Purchase price
D. Salaries of selling staff
Answer» D. Salaries of selling staff
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