Costing - Study Mode

[#316] Absorption means ________.
Correct Answer

(B) charging of overheads to cost units

Explanation

Solution: Absorption means charging of overheads to cost units. It means costs is absorbed by the production (or product units )during the period or charging each unit of a product with an equitable share of overhead expenses.

[#317] Which of the following is a service department?
Correct Answer

(C) Receiving department

Explanation

Solution: Receiving department is a service department. A service department is a cost center that provides services to the rest of a company. The manager of a service department is responsible for keeping costs down, or meeting the costs stated in a budget.

[#318] Under which incentive wage system two piece rates (high and low) are determined:
Correct Answer

(D) Taylor's Differential System

[#319] When the contract is not executed at the end of the accounting year, profit on an incomplete contract is transferred to
Correct Answer

(D) Profit and loss account and accumulation/reserves

[#320] Which of the following system applies when standardised goods are produced under a series of operations?
Correct Answer

(B) Process costing