Costing - Study Mode
[#991] In a normal accounting period, allocated amount of indirect cost is $2000 and actual amount is $2200, then this is classified as
Correct Answer
(A) over allocated budget
Explanation
Solution: In a normal accounting period, allocated amount of indirect cost is $2000 and actual amount is $2200, then this is classified as over allocated budget because allocated amount is less than actual amount.
[#992] Spread of over allocated overhead and under allocated overhead among work in process, finished goods and goods sold cost is classified as
Correct Answer
(A) proration approach
Explanation
Solution: Spread of over allocated overhead and under allocated overhead among work in process, finished goods and goods sold cost is classified as proration approach.
[#993] Material requisition is meant for ________.
Correct Answer
(B) supply of material from stores
Explanation
Solution: Material requisition is meant for supply of material from stores. A materials requisition form is a source document that the production department uses to request materials for manufacturing process. The production manager usually fills out the materials requisition form and delivers it to the materials or storage department where all of the raw materials are stored.
[#994] ABC analysis is ________.
Correct Answer
(B) Always better Control
Explanation
Solution: ABC analysis is a way of categorizing the material on the basis of the quantity of consumption and their relative values. Some material might be consumed in lower quantities but their period may be very high. Such materials are kept in group "A". Similarly, some material may be consumed in large quantities but their values may be lower. Such materials are kept in group 'C'. In between these two, some materials may be consumption in moderate quantity with the moderated price. Such materials are kept in group 'B' under ABC analysis very close control is exercised over the material in group 'A' whereas a very little control is exercise is exercised over the material in group 'C'.
[#995] ___________ is the value of economic resources used as a result of producing or doing the thing costed.
Correct Answer
(A) Cost
Explanation
Solution: Cost is the value of economic resources used as a result of producing or doing the thing costed. Cost is ascertained by cost centres or cost units or by both.