Costing - Study Mode

[#666] A document which contains information about materials of specific product, in specific department comes under
Correct Answer

(C) material acquisition method

Explanation

Solution: A document which contains information about materials of specific product, in specific department comes under material acquisition method

[#667] If budgeted annual indirect cost is $60000, budgeted annual quantity of cost allocation base is $3600, then budgeted indirect cost rate will be
Correct Answer

(B) 16.67 per piece

Explanation

Solution: Budgeted indirect cost rate = Budgeted annual indirect cost ÷ Budgeted annual quantity of cost allocation = $60000 ÷ $3600 = 16.67 per piece

[#668] An under allocated indirect cost is also called
Correct Answer

(D) both a and b

Explanation

Solution: An under allocated indirect cost is also called under applied indirect cost and under absorbed indirect cost.

[#669] In normal costing, situation in which allocated amount of indirect cost is greater than incurred cost, is considered as
Correct Answer

(B) over allocated indirect cost

Explanation

Solution: In normal costing, situation in which allocated amount of indirect cost is greater than incurred cost, is considered as over allocated indirect cost. Indirect costs are usually grouped into common pools and charged to benefiting objectives through an allocation process/indirect cost rate.

[#670] A group of individual indirect cost item is defined as
Correct Answer

(B) cost pool

Explanation

Solution: A group of individual indirect cost item is defined as cost pool. Cost pools is an accounting term that refers to groups of accounts serving to express the cost of goods and service allocatable within a business or manufacturing organization.