Overheads - Practice Questions for F2 PDF

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Practice Questions for F2...

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1. A company manufactures two products, E and F, in a factory divided into two production cost centres, Primary and Finishing. In order to determine a budgeted fixed overhead cost per unit of product, the following budgeted data are relevant. Prim ary

Finishing

$84,000

$93,000

E

36

25

F

30

40

Allocated and a pportioned fixed costs Direct labour -- minutes per unit

Budgeted production is 9,000 units of E and 6,000 units of F. Fixed overheads are to be absorbed on a direct la bour hour b as is. What is the budgeted fixed overhead cost of a unit of product E? A

$10

B

$11

C

$12

D

$13

2. Billecarte Ltd manufactures two products, Zonk and Tink, in a factory divided into two production cost centres, Machining and Assembly. In order to fnd a fxed overhead cost per unit, the following budgeted data are relevant. Machining

Assembly

$1 20,000

$72,000

Zank

0.50 hours

0.20 hours

Tink

1.00 hours

0.25 hours

Direct and allocated fixed costs Labour hours per unit

Budgeted production is 4,000 units of each product and fixed ov erheads are to be absorbed by reference to labou r h ours. What should be the budgeted fixed overhead cost of a unit of Zank? A

$28

B

$24

C

$20

D

$18

3. Here are three statements on the determination of overhead absorption rates: (1) Costs can be allocated where it i s possible to id entify the department that caused them. (2 ) Costs need to be apportioned where they are shared by more than one department. (3) S ervice centre costs should not be in clud ed in unit overhead costs. Which of these statements are correct? A

(1) and (2) only

B

(1) and (3) only

C

(2) and (3) only

D

(1 ), (2) and ( 3)

4. The following statements refer to overhead absorp tion: (1) Factory rent and rates are typically allocated to departments rather than apportion ed. (2 ) A single product fir m does not need to apportion overheads to find a cost per unit. (3) I f depart me ntal overhead recovery rates are similar it makes little difference if overheads are applied on a dep artm ental or b usin ess wide basis. Which of these statements are correct? A (1) and (2) only B (1) and (3) only C (2) and (3) only D (1 ), (2) and ( 3 5. A manufa ctur ing organisation has two production d epart ments (Machining and Finishing) and two service departments (Quality c ontrol and M ainten ance). After primary apportionment th e overheads for the factory are as follow s: What is the total overhead to be apportioned to the Finishing de partment? To tal

Machi ning

Finishing

QC

Maintenance

$633,000

$220,000

$160, 000

$140,000

$113,0 0 0

Work done by QC

45 %

35%

-

20%

Work done A $124, 750 By Maint'ce B $284, 750

30%

40%

30%

-

Overheads

C

$285, 821

D

$348, 250...