Costing - Study Mode
[#701] An approach which yields benefits of normal costing and actual manufacturing overhead is classified as
Correct Answer
(D) adjusted allocation rate approach
Explanation
Solution: An approach which yields benefits of normal costing and actual manufacturing overhead is classified as adjusted allocation rate approach. The adjusted allocation-rate approach restates or corrects estimated overhead costs booked throughout the year, so that the actual overhead costs are recorded properly.
[#702] Process of assigning direct or indirect cost to any cost object is known as
Correct Answer
(A) cost assignment
Explanation
Solution: Process of assigning direct or indirect cost to any cost object is known as cost assignment. Cost assignment is the allocation of costs to the activities or objects that triggered the incurrence of the costs.
[#703] An average unit cost, applicable to each similar produced units is classified as
Correct Answer
(A) per unit cost
Explanation
Solution: An average unit cost, applicable to each similar produced units is classified as per unit cost.
[#704] If budgeted direct labour hours are 4550 and direct labour cost rate is $600 per labour hour then, total direct labour cost would be
Correct Answer
(C) $2,730,000
Explanation
Solution: Total direct labour cost = Budgeted direct labour hours × Direct labour cost rate = 4550 × $600 = $2,730,000
[#705] If an overhead cost of operating a machine is $500000 for 1000 hours, then cost allocation rate will be
Correct Answer
(C) $500 per machine hour