Reference no: EM132618954

Problem 1: Total of indirect material, indirect labour and indirect expenses is called:

a. Indirect overhead

b. Production cost

c. Overheads cost

d. Chargeable cost

e. All of the above

Problem 2: A company uses an overhead absorption rate of R3.50 per machine hour, based on 32 000 budgeted machine hours for the period. During the same period the actual total overhead expenditure amounted to R108 875 and 30 000 machine hours were recorded on actual production.

By how much was the total overhead under or over absorbed for the period?

a. Under absorbed R3 875

b. Under absorbed R7 000

c. Over absorbed R3 875

d. Over absorbed R7 000

e. Over absorbed R8 875

Problem 3: Electricity charges are allocated on the basis of:

a. Number of light points

b. Cost of machines

c. Factory costs

d. a and b

e. b and c

Problem 4: Employee welfare expenses are allocated on the basis of:

a. Labour hours

b. Number of employees

c. Machine hours

d. Prime cost

e. None of the above

Problem 5: Manufacturing costs consist of the following:

a. Prime cost + manufacturing overheads

b. Conversion cost + manufacturing overheads

c. Direct materials + direct labour + manufacturing overheads

d. a and c

e. a, b and c