Accounting for Overhead

Question 1

aggregate of indirect materials, indirect wages and other indirect expenses

Answer 1

overheads

Question 2

it is the total of indirect expenditure, over and above the prime cost

Answer 2

overheads

Question 3

direct materials + direct labor

Answer 3

prime cost

Question 4

specifically and exclusively identified with a given cost object, hence they can be accurately traced to cost objects

Answer 4

direct cost

Question 5

cannot be directly traced, hindi agad kayang malaman ang expenses or bill

Answer 5

indirect cost

Question 6

cost tracing

Answer 6

• direct cost
• cost tracing
• cost objects

Question 7

cost allocations

Answer 7

• indirect cost
• cost allocations
• traditional costing systems
• abc systems
• cost objects

Question 8

process of grouping costs according to their common characteristics and establishments of a series of special groups according to cost class

Answer 8

cost classification

Question 9

functions of cost classification (4)

Answer 9

• production overheads
• administrative overheads
• selling and packaging
• distribution

Question 10

elements of cost classification (3)

Answer 10

• indirect materials, labor, expenses

Question 11

behaviors of cost classification

Answer 11

• fixed overheads
• variable overheads
• semi-variable overheads

Question 12

These sheets may be used to keep a subsidiary record of factory overhead expenses

Answer 12

factory overhead analysis sheets

Question 13

2 examples of analysis spreadsheet

Answer 13

• expense-type
• department-type

Question 14

When factory overhead expenses are not identified with a specific department, they are charged to departments by a process of allocation.

Answer 14

general factory overhead expenses

Question 15

stages in overheads accounting (6)

Answer 15

• administrative
• computing
• codification
• allocation
• apportionment
• cost allocation

Question 16

Collection of overheads
Classification and codification of overhead

Answer 16

administrative

Question 17

direct/specific allocation, apportionment of overheads and re-apportionment of service depts

Answer 17

computing

Question 18

technique of intelligent description of numerous cost accounting heads for recording and controlling.
It helps to group items of overheads of similar nature.

Answer 18

codification

Question 19

It is the process of identification of overheads with a specific production or service department

Answer 19

allocation

Question 20

It is the allotment of proportions of items to departments or units.

Answer 20

apportionment

Question 21

Where a cost can be clearly identified with a cost center or a cost unit, then it can be allocated to that cost center or cost unit.

Answer 21

cost allocation

Question 22

means that the overhead absorption rate is calculated prior to the accounting period, using estimated or budgeted figure

Answer 22

predetermined factory overhead rates

Question 23

some commonly used predetermined bases are (2)

Answer 23

• direct labor hours method
• machine hours

Question 24

frequently used in the labour intensive department because overheads assigned to this departments are closely related to the direct labour

Answer 24

direct labor hours

Question 25

It is most appropriate for the machining department since most of the overheads are closely related to machine hours

Answer 25

machine hours

Question 26

Best serves highly automated departments where the amount of factory overhead cost incurred on a job is primarily a function of the machine time that a job requires

Answer 26

machine hour method