Additional Chapter 5 Questions
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rhceandcebeinmohlpAdditional Chapter 5 Questions
Uploaded by
rhceandcebeinmohlp1.
A factory consists of two production cost centres (P and Q) and two service cost centres (X and
Y). The total allocated and apportioned overhead for each is as follows:
After the reapportionment of service cost centre costs has been carried out using a
method that fully recognises the reciprocal service arrangements in the factory, what is
the total overhead for production cost centre P?
A $122,400
B $124,716
C $126,000
D $127,000
2. A company uses absorption costing with a pre-determined hourly fixed overhead absorption
rate. Last year, the following situations arose:
(1) Actual overhead expenditure was less than the budgeted expenditure
(2) Actual hours worked were less than the budgeted hours used to set the pre
determined overhead absorption rate
What would be the effect of each situation on the under/over absorption of fixed
production overheads?
3. A company uses a blanket overhead absorption rate of $5 per direct labour hour. Actual
overhead expenditure in a period was as budgeted.
The under/over absorbed overhead account for the period have the following entries:
Which of the following statements is true?
A Actual direct labour hours were 800 less than budgeted
B Actual direct labour hours were 800 more than budgeted
C Actual direct labour hours were 4,000 less than budgeted
D Production overhead was over absorbed by $4,000
4. Budgeted information relating to two departments in ACo for the next period is as follows:
5. HMF Co hast wo service centres serving two production departments. Overhead costs
Apportioned to each department are as follows.
6. An accountant is using the repeated distribution method to reapportion service department
costs. The following table shows the work she has done so far. Figures that are yet to be
calculated are shown as “???”
7. Consider the following statements, regarding the reapportionment of service cost centre
Overheads to production cost centres, where reciprocal services exist.
