1701. Absorption means :
A. Charging of overheads to cost units *
B. Fees charged to cost centers or cost units for overhead
C. Charging of overheads to cost centre
D. None of them
1702. The costs of administration are recouped as a percentage of:
A. Direct materials
B. Prime cost
C. Direct wages
D. Works cost *
1703. Which of the following is a service department ?
A. Refining department
B. Receiving department *
C. Machining department
D. Finishing department
1704. Which of the following is not selling overhead ?
A. Transportation insurance to cover sold goods *
B. Royalty on sales
C. Legal costs for debt realisation
D. Distribution of samples
1705. In the case of a company that only produced one type of uniform product, which strategy would you recommend for covering factory overhead costs?
A. Percentage of direct wages basis
B. A rate per unit of output *
C. Direct labour hour rate
D. Any of the above
1706. When the amount of under-or over absorption is significant , it should be disposed of by :
A. Moving into the profit and loss costing account
B. The use of supplementary rates *
C. Extending as a conceded charge to the following bookkeeping year
D. none of them
1707. Idle capacity of a plant refers to the difference between :
A. Maximum capacity and practical capacity
B. Practical capacity and normal capacity
C. Capacity based on actual sales expectations and capacity *
D. Maximum capacity and actual capacity
1708. Maximum possible productive capacity of a plant, when no operating time is lost, is its:
A. Practical capacity
B. Theoretical capacity
C. Normal capacity *
D. Capacity based on sales
1709. The capacity which is based on the long term average of the sales expectancy level is known as :
A. Practical capacity
B. Normal capacity *
C. Actual capacity
D. None of these
1710. When the amount of overhead absorbed is less than the amount of overhead incurred, it is called :
A. Under-absorption of overhead *
B. Over-absorption of overhead
C. Proper absorption of overhead
D. None of them