Cost Accounting: Predetermined Overhead Absorption Rate Quiz

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What were the total direct costs incurred in the manufacture of the product?

$18,600

$84,000

$29,400

$27,000 (correct)

How many machine hours were worked during the period?

6,000 hours

1,000 hours (correct)

7,800 hours

500 hours

What was the total selling and admin overheads based on the given information?

$8,400

$12,000

$10,000

$9,000 (correct)

How was the total overhead cost absorbed in this case?

Per machine hour worked Signup and view all the answers

What is a cost unit defined as?

A unit of a product or service which has costs attached to it Signup and view all the answers

What does a responsibility center primarily focus on?

Cost control and performance evaluation Signup and view all the answers

What is the correct method to calculate predetermined overhead absorption rate?

Budgeted cost / Budgeted hours Signup and view all the answers

In job costing, what is a characteristic of the approach?

Each job is costed separately for a single order or contract Signup and view all the answers

What is the sharing of central costs to each cost center known as?

Apportionment Signup and view all the answers

Which factor is used to absorb the overheads in a manufacturing cost center in the given text?

Labour hours Signup and view all the answers

What is the correct predetermined overhead absorption rate to two decimal places in the text example?

$2.08 Signup and view all the answers

What is the correct Return on Capital Employed (ROCE) for Department B?

5.75% Signup and view all the answers

What is the Labour Efficiency ratio if the Capacity Utilisation ratio is 120%?

110% Signup and view all the answers

If the predetermined overhead absorption rate is $8 per machine hour and actual machine hours worked are 1,200, what is the total overhead absorbed?

$10,000 Signup and view all the answers

In apportioning costs based on floor space, if Department A has 3,000 square feet and Department B has 2,000 square feet, what percentage of the total cost will Department A bear if the total cost is $60,000?

60% Signup and view all the answers

What is the correct formula to calculate predetermined overhead absorption rate?

$ Budgeted overhead / Normal capacity hours Signup and view all the answers

If a company apportions central costs based on revenue, and Department A generates $500,000 while Department B generates $300,000 in revenue, what percentage of central costs will Department A bear if total central costs are $100,000?

$66,667 Signup and view all the answers

Cost Accounting: Predetermined Overhead Absorption Rate Quiz

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