Factory Overhead MCQs (1-10)

1. Which of the following would be classified as direct material for a furniture manufacturer?

(a) Wood

(b) Glue

(c) Screws

(d) Wood cleaner

Correct! Wrong!

2. Which of the following is not classified as a factory overhead cost?

(a) Electricity to run factory machines

(b) Insurance to protect the factory contents

(c) Security guards that protect the factory building

(d) Advertising cost to promote the finished goods

Correct! Wrong!

3. The process of assigning share of indirect costs to cost centers is called?

(a) Apportionment

(b) Variable costing

(c) Cost allocation

(d) Joint costing

Correct! Wrong!

4. Where there is mass production of homogeneous units or where few products are produced in batches, which of the following cost driver would be regarded as best base for the determination of Factory overhead absorption rate?

(a) Number of units produced

(b) Labor hours

(c) Prime cost

(d) Machine hours

Correct! Wrong!

5. It is possible for an item of overhead expenses to be shared amongst many departments. It is also possible that this same item may relate to just one specific department. If the item was charged specifically to a single department this would be an example of?

(a) Apportionment

(b) Allocation

(c) Re-apportionment

(d) Absorption rate

Correct! Wrong!

6. The predetermined overhead rate is calculated as?

(a) Budgeted total manufacturing overhead divided by budgeted activity level of application base

(b) Budgeted total manufacturing overhead divided by actual activity level of application base

(c) Actual total manufacturing overhead divided by budgeted activity level of application base

(d) Actual total manufacturing overhead divided by actual activity level of application base

Correct! Wrong!

7. Which of the following items would not be classified as direct material for an automobile manufacturer?

(a) Steel

(b) Paint

(c) Tires

(d) Screws

Correct! Wrong!

8. The cost objective is the?

(a) Reason for allocating the cost

(b) Calculation based on budgeted amounts

(c) Product, service, or department that is to receive the allocation

(d) Maximum amount to be allocated to any single department

Correct! Wrong!

9. When too much overhead cost is charged to products as they are made, the result is?

(a) Overapplied overhead

(b) Underapplied overhead

(c) Understatement of Cost of Goods Sold

(d) Inventory cost is too low

Correct! Wrong!

10. Absorption costing is closely related to which of the following cost elements?

(a) Total costs

(b) Overheads

(c) Prime costs

(d) Direct labor

Correct! Wrong!

1. Which of the following would be classified as direct material for a furniture manufacturer?

2. Which of the following is not classified as a factory overhead cost?

3. The process of assigning share of indirect costs to cost centers is called?

4. Where there is mass production of homogeneous units or where few products are produced in batches, which of the following cost driver would be regarded as best base for the determination of Factory overhead absorption rate?

5. It is possible for an item of overhead expenses to be shared amongst many departments. It is also possible that this same item may relate to just one specific department. If the item was charged specifically to a single department this would be an example of?

6. The predetermined overhead rate is calculated as?

7. Which of the following items would not be classified as direct material for an automobile manufacturer?

8. The cost objective is the?

9. When too much overhead cost is charged to products as they are made, the result is?

10. Absorption costing is closely related to which of the following cost elements?

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