Cost Accounting Important Multiple Choice questions (MCQs) B.COM (Hons) : Gauhati University Cost Accounting Important MCQS, Dibrugarh University Cost Accounting Important MCQS, Ravindranath Tagore University Cost Accounting Important MCQS,Cost Accounting Important Multiple Choice Questions Answers.
In this article you will get very very Important Cost Accounting Unit-4 Element Of Cost : Overheads MCQs for B.com (Hons). Which can be Very Useful for scoring a good marks in your Semester & Sessional Exams Conduct by Colleges/Universities.
COST ACCOUNTING MCQS
Unit 4
ELEMENT OF COST : OVERHEADS
Q.1 (A): Fill in the blanks with most appropriate words :
(i) Overheads are the aggregate of______,______and______.
Ans: Indirect material, indirect labour and indirect expenses
(ii) In absorption costing_____ cost is added to inventory.
Ans: Fixed
(iii) Under or over absorption of overheads arises only when overheads are absorbed by______.
Ans: Predetermined overheads rates.
(iv) Administration overheads are usually absorbed as a percentage of______.
Ans: Works cost.
(v) The difference between actual and absorbed as a percentage of______.
Ans: Under or over absorbed overheads
(vi) The______ rate is computed by diving the overheads by the aggregate of the productive hours of direct workers.
Ans: Direct labour hour
(vii) Overheads incurred Rs. 10000 and overhead absorbed Rs. 9000. There is under absorption of Rs.
Ans : Rs. 1000
(viii) The term used for charging of overheads to cost units is known as_____.
Ans: Absorption
(ix) Overhead cost is the aggregate of indirect material cost, indirect wages and______.
Ans: Indirect expenses
(x) Under absorption of overhead due to faulty management should be charged to_____.
Ans: Costing profit and Loss account.
Q1(B): State whether the following statements are 'True' or 'False':
(i) Under absorption of overheads means the amount by which the absorbed overheads fall short of the actual amount of overheads incurred.
Ans: True
(ii) Over absorption of overhead means the excess of overheads absorbed over the actual amount of overheads incurred.
Ans : True
(iii) Factory overhead cost applied to a job is usually based on predetermined rate.
Ans: True
(iv) Allocation of overheads implies the identification of overhead cost centres to which they relate.
Ans: True
(v) Idle capacity is the difference between capacity based on sales expectancy and practical capacity.
Ans: True
(vi) Overhead are also known as indirect expenses.
Ans: True
(vii) Basis of apportionment of depreciation of plants is values of plant in each departments.
Ans: True
(viii) Machine hour rate method of absorption should be used in only those cost centres in which work is dominantly done by machines.
Ans: True
(ix) Overhead comprises indirect material, indirect labour and chargeable expenses.
Ans: False
(x) Blanket rate is a single rate of absorption computed for the entire factory.
Ans: True
(xi) Labour hour rate of absorption is most suited to a department in which work is done by manual method.
Ans: True
(xii) Machine hour rate method of absorption is computed on the basis of number of hours a machine works during the accounting period.
Ans: True
(xiii) Cash discounts are generally excluded completely from the costs.
Ans: True
(xiv) Variable overhead vary with time.
Ans : False
(xv) Departments that assist producing department indirectly are called service departments.
Ans: True
Q1(C): Choose the correct alternative from the following:
(i) The allotment of whole items of cost centre or cost unit is called.
(b) Cost apportionment (c) Overhead absorption (d) None of the above
(a) Cost allocation
Ans: (a) Cost allocation
(ii)Packing cost is a____.
(a) Production of cost
(b) Selling cost
(c) Distribution cost
(d) Any of the above
Ans : (d) Any of the above
(iii) Directors remuneration and expenses form a part of
(a) Production Overheads
(b) Administration Overheads
(c) Selling Overheads
(d) None of the above
Ans : (b) Administration Overheads
(iv) Charging to a cost centre those overheads that result solely for the existence is known as
(a) Allocation
(b) Apportionment
(c) Absorption
(d) Allotment
Ans : (a) Allocation
(v)Absorption means____
(a) Charging of overheads to cost centres (b) Charging of overheads to cost units
(c) Charging of overheads to cost centres or cost units
(d) None of the above
Ans : (b) Charging of overheads to cost units
(vi) Which method of absorption of factory overheads is suitable in a concern which produces only one uniform type of product.
(a) Percentage of direct wages basis
(b) Direct labour rate
(c) Machine hour rate
(d) A rate per units of output
Ans : (d) A rate per units of output
(vii) When the amount of under or over absorption is significant, it should be disposed by
(a) Transferring to costing profit and loss account
(b) The use of supplementary rate
(c) Carrying over as a deferred charge to the accounting year
(d) None of the above
Ans : (b) The use of supplementary rate
(viii) When the amount of overhead absorbed is less than the amount of overhead incurred, it is called
(a) Under absorption of overheads
(b) Over absorption of overheads
(c) Proper absorption of overheads
(d) None of the above
Ans: (a) Under absorption of overheads
(ix) Warehouse expenses is an example of (a) Production overheads
(b) Selling overheads
(c) Distribution overheads
(d) None of the above
Ans: (c) Distribution overheads
(x) Selling and Distribution overhead are absorbed on the basis of
(a) Rate per unit
(b) Percentage on work cost
(c) Percentage on selling price per unit
(d) Any of the above
Ans : (d) Any of the above
(xi) Bad debt is shown under the head
(a) Factory overheads
(b) Administrative overheads
(c) Selling overheads
(d) Distribution overheads
Ans : (c) Selling overheads
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