Costing - Study Mode
[#1056] Which of the following is not a method of cost absorption?
Correct Answer
(D) Repeated distribution method
Explanation
Solution: Repeated distribution method is not a method of cost absorption. Absorption costing is a method for accumulating the costs associated with a production process and apportioning them to individual products.
[#1057] Service departments costs should be allocated to:
Correct Answer
(C) Both Production and service departments
Explanation
Solution: The service departments render service (benefit) to the production departments. Service departments may exist to provide services of various kinds to other departments. For example, personnel, maintenance, boiler house, pump house, power generation departments are service departments which provide service to the production and other service centres.
[#1058] Most suitable basis for apportioning insurance of machine would be:
Correct Answer
(B) Value of Machines
Explanation
Solution: Most suitable basis for apportioning insurance of machine would be Value of Machines.
[#1059] Blanket overhead rate is:
Correct Answer
(A) One single overhead absorption rate for the whole factory
Explanation
Solution: Blanket overhead rate is one single overhead absorption rate for the whole factory. It is a common absorption rate used throughout a factory and for all jobs and units of output irrespective of the departments in which they were produced or processed. It is a one single overhead absorption rate for the whole of the factory.
[#1060] AT Co makes a single product and is preparing its material usage budget for next year Each unit of product requires 2kg of material, and 5,000 units of product are to be produced next year Opening inventory of material is budgeted to be 800 kg and AT co budgets to increase material inventory at the end of next year by 20%.
The material usage budget for next year is
Correct Answer
(C) 10,000 Kg