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- 1 Marks
MI – May 2021 – L1 – SA – Q9 – Costing Methods
Identify the costing method that uses composite cost units.
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- Tags: Composite Cost Unit, Costing Methods, Service Costing
- Level: Level 1
- Topic: Costing Methods
- Series: MAY 2021
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- 1 Marks
MI – May 2021 – L1 – SA – Q3 – Costing Methods
Identify the definition of overhead apportionment.
Question
Overhead apportionment is a process of:
A. Charging costs to a number of cost centres or units
B. Direct allocation of costs to cost centres or cost units
C. Accounting for some portion of costs and carrying forward the balance
D. Sharing costs into direct and indirect elements
E. Differentiating between variable and fixed costs
Find Related Questions by Tags, levels, etc.
- Tags: Cost Allocation, Costing Methods, Overhead Apportionment
- Level: Level 1
- Topic: Costing Methods
- Series: MAY 2021
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- 1 Marks
MI – Mar-Jul 2020 – L1 – SA – Q2 – Costing Methods
Identify the incorrect method of allocating service department costs.
Question
In a manufacturing set-up, the service department provides services to other service departments as well as the production department. Which of the following is NOT a method of allocating the service department cost?
A. Specified order of closing
B. Repeated distribution method
C. Indirect allocation method
D. Simultaneous equation method
E. Matrix method
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- 10 Marks
MI – May 2016 – L1 – SB – Q6b – Costing Methods
Application of Activity-Based Costing (ABC) to allocate overhead costs and calculate cost per unit for products X, Y, and Z.
Question
Quick Company Limited manufactures three products X, Y, and Z. Production and related costs have been budgeted for a period as follows:
| PRODUCT | X | Y | Z |
|---|---|---|---|
| No. of Units | 40,000 | 30,000 | 10,000 |
| Direct Materials | 600,000 | 300,000 | 160,000 |
| Direct Labour | 400,000 | 150,000 | 200,000 |
| Machine hours | 10,000 | 6,000 | 4,000 |
Overhead costs:
| Overhead Type | Amount (₦) |
|---|---|
| Purchasing function | 180,000 |
| Machine related costs | 114,000 |
| Set-up cost | 132,000 |
| Storage | 48,000 |
| Materials handling | 88,000 |
| Inspection | 120,000 |
| Total | 682,000 |
The following activities related to the product line have been budgeted for the period:
| PRODUCT | X | Y | Z | Total |
|---|---|---|---|---|
| Number of purchases | 20 | 30 | 50 | 100 |
| Number of stores requisitions | 100 | 80 | 60 | 240 |
| Number of set ups | 80 | 140 | 180 | 400 |
| Number of movements of materials | 120 | 36 | 20 | 176 |
| Number of inspections | 336 | 90 | 74 | 500 |
Required:
Calculate the cost per unit for each product using the Activity-Based Costing (ABC) system.
Find Related Questions by Tags, levels, etc.
- Tags: Activity-Based Costing, Cost Allocation, Costing Methods, Overhead Costs
- Level: Level 1
- Series: MAY 2016
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- 1 Marks
MI – May 2021 – L1 – SA – Q9 – Costing Methods
Identify the costing method that uses composite cost units.
Find Related Questions by Tags, levels, etc.
- Tags: Composite Cost Unit, Costing Methods, Service Costing
- Level: Level 1
- Topic: Costing Methods
- Series: MAY 2021
Report an error
- 1 Marks
MI – May 2021 – L1 – SA – Q3 – Costing Methods
Identify the definition of overhead apportionment.
Question
Overhead apportionment is a process of:
A. Charging costs to a number of cost centres or units
B. Direct allocation of costs to cost centres or cost units
C. Accounting for some portion of costs and carrying forward the balance
D. Sharing costs into direct and indirect elements
E. Differentiating between variable and fixed costs
Find Related Questions by Tags, levels, etc.
- Tags: Cost Allocation, Costing Methods, Overhead Apportionment
- Level: Level 1
- Topic: Costing Methods
- Series: MAY 2021
Report an error
- 1 Marks
MI – Mar-Jul 2020 – L1 – SA – Q2 – Costing Methods
Identify the incorrect method of allocating service department costs.
Question
In a manufacturing set-up, the service department provides services to other service departments as well as the production department. Which of the following is NOT a method of allocating the service department cost?
A. Specified order of closing
B. Repeated distribution method
C. Indirect allocation method
D. Simultaneous equation method
E. Matrix method
Find Related Questions by Tags, levels, etc.
Report an error
- 10 Marks
MI – May 2016 – L1 – SB – Q6b – Costing Methods
Application of Activity-Based Costing (ABC) to allocate overhead costs and calculate cost per unit for products X, Y, and Z.
Question
Quick Company Limited manufactures three products X, Y, and Z. Production and related costs have been budgeted for a period as follows:
| PRODUCT | X | Y | Z |
|---|---|---|---|
| No. of Units | 40,000 | 30,000 | 10,000 |
| Direct Materials | 600,000 | 300,000 | 160,000 |
| Direct Labour | 400,000 | 150,000 | 200,000 |
| Machine hours | 10,000 | 6,000 | 4,000 |
Overhead costs:
| Overhead Type | Amount (₦) |
|---|---|
| Purchasing function | 180,000 |
| Machine related costs | 114,000 |
| Set-up cost | 132,000 |
| Storage | 48,000 |
| Materials handling | 88,000 |
| Inspection | 120,000 |
| Total | 682,000 |
The following activities related to the product line have been budgeted for the period:
| PRODUCT | X | Y | Z | Total |
|---|---|---|---|---|
| Number of purchases | 20 | 30 | 50 | 100 |
| Number of stores requisitions | 100 | 80 | 60 | 240 |
| Number of set ups | 80 | 140 | 180 | 400 |
| Number of movements of materials | 120 | 36 | 20 | 176 |
| Number of inspections | 336 | 90 | 74 | 500 |
Required:
Calculate the cost per unit for each product using the Activity-Based Costing (ABC) system.
Find Related Questions by Tags, levels, etc.
- Tags: Activity-Based Costing, Cost Allocation, Costing Methods, Overhead Costs
- Level: Level 1
- Series: MAY 2016
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