Costing mcqs

✅ The correct answer is A.
Depreciation of plant can be apportioned on the basis of plant value.

✅ The correct answer is C.
Practice, which makes target more achievable by underestimating revenues or overestimating cost is called budgetary slack. Budgetary slack is the deliberate under-estimation of budgeted revenue or over-estimation of budgeted expenses.

✅ The correct answer is C.
Process of assigning indirect costs to any specific cost object is known as cost allocation. Cost allocation is the process of identifying, aggregating, and assigning costs to cost objects. A cost object is any activity or item for which you want to separately measure costs.

✅ The correct answer is A.
Method of estimation of cost function, by making opinions and analysis about cost and cost drivers is classified as conference method. The conference method is an approach to cost estimation that pools together data, analyses, and knowledge from expert sources in order to make decisions about costs.

✅ The correct answer is D.
Annual indirect cost (budgeted) = Budgeted indirect cost × Budgeted cost allocation
= $115 × $830 = $95,450

✅ The correct answer is B.
Actual result = Flexible budget amount + Flexible budget variance
= $57000 + $14000 = $71,000

✅ The correct answer is C.
If overtime is resorted to at the desire of the customer, then the overtime premium should be charged to the job directly. Overtime premium is paid to the workers for the extra time worked than the normal working hours specified in the Factories Act, 1948 or work agreement with the union.

✅ The correct answer is A.
In a normal accounting period, an allocated amount of indirect cost is $700 and an actual amount is $800, then this can be classified as under allocated indirect cost because the allocated amount is less than actual amount.

✅ The correct answer is A.

✅ The correct answer is D.
Approaches used to allocate joint costs include sales value at split off method, net realizable value method and constant gross margin percentage NRV method.