Podcast
Questions and Answers
Which method is used to allocate overheads directly to specific cost centres?
Which method is used to allocate overheads directly to specific cost centres?
- Absorption
- Apportionment (correct)
- Unit Costing
- Activity-Based Costing
What is the basis for apportioning overheads for depreciation and insurance of machinery?
What is the basis for apportioning overheads for depreciation and insurance of machinery?
- Carrying Amount of non-current assets (correct)
- Machine Hours
- Floor Area
- Number of Employees
What is the formula for calculating the Overhead Absorption Rate (OAR)?
What is the formula for calculating the Overhead Absorption Rate (OAR)?
- $OAR = Budgeted total of absorption basis/Floor Area$
- $OAR = Budgeted production overhead/Number of Employees$
- $OAR = Budgeted total of absorption basis/Budgeted production overhead$
- $OAR = Budgeted production overhead/Budgeted total of absorption basis$ (correct)
Which basis is NOT commonly used for absorbing overheads into cost units?
Which basis is NOT commonly used for absorbing overheads into cost units?
In marginal costing, what is the main focus when making pricing decisions?
In marginal costing, what is the main focus when making pricing decisions?
What is the alternative to individual cost center Overhead Absorption Rate (OAR)?
What is the alternative to individual cost center Overhead Absorption Rate (OAR)?
What is the formula to calculate full production cost of a unit?
What is the formula to calculate full production cost of a unit?
What is the formula to calculate contribution in marginal costing?
What is the formula to calculate contribution in marginal costing?
In activity-based costing (ABC), how are traditional overhead costs typically split?
In activity-based costing (ABC), how are traditional overhead costs typically split?
What is the main problem with traditional costing methods according to the text?
What is the main problem with traditional costing methods according to the text?
In absorption costing, what is the approach to determining selling price?
In absorption costing, what is the approach to determining selling price?
What is the core principle underlying marginal costing?
What is the core principle underlying marginal costing?
What is the purpose of inventory valuation in management accounting?
What is the purpose of inventory valuation in management accounting?
Which of the following is an example of a cost unit?
Which of the following is an example of a cost unit?
What is the main purpose of a cost card in management accounting?
What is the main purpose of a cost card in management accounting?
Which cost centre is an example of a function or activity for which costs can be ascertained?
Which cost centre is an example of a function or activity for which costs can be ascertained?
In management accounting, what does pricing based on cost aim to achieve?
In management accounting, what does pricing based on cost aim to achieve?
How does understanding the cost aid decision-making in management accounting?
How does understanding the cost aid decision-making in management accounting?
