Costing

✅ The correct answer is C.
Budgeted annual indirect costs are divided to budgeted annual quantity of cost allocation base to calculate budgeted indirect cost rate. The budgeted indirect cost rate formula is calculated by dividing the budgeted annual indirect costs by the budgeted annual quantity of the cost allocation base.

✅ The correct answer is D.
Deviations between estimated regression line and vertical deviations are classified as residual terms.

✅ The correct answer is A.
The allotment of whole item of cost to cost centre or cost units is called cost allocation. The term allocation means the allotment of the whole item without division to a particular department or cost centre.

✅ The correct answer is C.

✅ The correct answer is A.
Normal spoilage is subtracted from total spoilage to calculate abnormal spoilage. Abnormal spoilage is the amount of waste or destruction of inventory beyond what is expected in normal business processes.

✅ The correct answer is B.
A unit cost calculated in costing system, by assigning total costs incurred to many similar units is categorized as process costing system. Process costing is a type of operation costing which is used to ascertain the cost of a product at each process or stage of manufacture.

✅ The correct answer is A.
An acquisition cost of raw material is to be used in manufacturing, and becoming a component of cost object is classified as direct material costs. Direct materials cost the cost of direct materials which can be easily identified with the unit of production. For example, the cost of glass is a direct materials cost in light bulb manufacturing.

✅ The correct answer is D.
Labour which works as forklift truck, plant guards and rework labour is classified as manufacturing overhead. Manufacturing overhead is all indirect costs incurred during the production process. This overhead is applied to the units produced within a reporting period.

✅ The correct answer is A.
Large residual term and negative slope of line indicate inverse proportion.

✅ The correct answer is B.
A group of individual indirect cost item is defined as cost pool. Cost pools is an accounting term that refers to groups of accounts serving to express the cost of goods and service allocatable within a business or manufacturing organization.