Costing - Study Mode
[#631] Defectives ________.
Correct Answer
(B) can be rectified and mad made into good units
Explanation
Solution: Defectives can be rectified and mad made into good units. The defective work report should draw details relating to department, process, defective units quantity, normal and abnormal defects, the cost of rectification etc.
[#632] Sundry overhead expenses may be apportioned in the ratio of ________.
Correct Answer
(C) labour hours
Explanation
Solution: Sundry overhead expenses may be apportioned in the ratio of labour hours. Sundry expenses are expenses that are small in amount and rare in occurrence. For these rare and insignificant expenses, a company might use a general ledger account entitled Sundry Expenses for these items.
[#633] Departmentalization of overhead is known as ________.
Correct Answer
(A) primary distribution
Explanation
Solution: Departmentalization of overhead is known as primary distribution. Primary distribution involves apportionment or allocation of overhead to all departments in a factory on logical and rational basis. This process of apportionment is also known as departmentalisation of overhead.
[#634] When the actual overhead is less than the absorbed overhead it is ________.
Correct Answer
(A) over absorption
Explanation
Solution: When the actual overhead is less than the absorbed overhead it is over absorption. If the absorbed overheads at predetermined rates are greater than actual overheads, this is known as OVER-ABSORPTION.
[#635] Factory overhead is Rs 3,00,000 and direct material cost is Rs 5,00,000 What is the overhead rate under direct material cost method?
Correct Answer
(C) 60%
Explanation
Solution: Overhead rate = Factory overhead / Direct material cost * 100 = 300000 / 500000 * 100 = 60%.