Costing - Study Mode
[#841] Systematic way of linking group of indirect cost to a cost object is classified as
Correct Answer
(D) cost allocation base
Explanation
Solution: Systematic way of linking group of indirect cost to a cost object is classified as cost allocation base. An allocation base is the basis upon which an entity allocates its overhead costs.
[#842] In a normal accounting period, an allocated amount of indirect cost is $700 and an actual amount is $800, then this can be classified as
Correct Answer
(A) under allocated indirect cost
Explanation
Solution: In a normal accounting period, an allocated amount of indirect cost is $700 and an actual amount is $800, then this can be classified as under allocated indirect cost because the allocated amount is less than actual amount.
[#843] If an actual indirect cost incur is $35000 and indirect cost allocated is $43000, then under allocated indirect cost will be
Correct Answer
(C) -$8000
Explanation
Solution: Under allocated indirect cost = Actual indirect cost incur - Indirect cost allocated = $35000 - $43000 = -$8000
[#844] If an actual manufacturing overhead costs is $225000 and actual total quantity of cost allocation base is 2500 labour hours, then overhead rate will be
Correct Answer
(B) $90
Explanation
Solution: Overhead rate = Actual manufacturing overhead costs ÷ Actual total quantity of cost allocation = $225000 ÷ 2500 = $90
[#845] Costing technique, in which actual direct rates are multiplied to quantity of direct cost inputs is classified as
Correct Answer
(B) actual costing
Explanation
Solution: Costing technique, in which actual direct rates are multiplied to quantity of direct cost inputs is classified as actual costing. Actual costing is the recording of product costs based on the following factors: Actual cost of materials.