Tag: Absorption Costing

Accounting Multiple Choice Question – 13 December 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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The following figures are given for a Alex Manufacturing Ltd’s factory’s overheads and machine hours worked.

   machine hours  total overhead costs  overhead absorption rate

  • budgeted   122,000 hrs   £268,400   £2.20 
  • actual    116,000hrs   £261,000   £2.25

What was the under- or over-absorption of overhead for the quarter?

Select ONE answer:

  1. £5,800 over-absorbed
  2. £5,800 under-absorbed
  3. £7,400 over-absorbed
  4. £7,400 under-absorbed

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

  1. Not correct
  2. Correct – (6,000 hrs * £2.2) – (£268,400 – £261,000)
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 10 December 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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What best describes the cost of direct materials plus direct labour costs?

Select ONE answer:

  1. absorption cost
  2. marginal cost
  3. prime cost
  4. total cost

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. Not correct
  2. Not correct
  3. Correct
  4. Not correct

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Accounting Multiple Choice Question – 5 November 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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The table contains information provided by a company.

  • budgeted direct labour hours – 8,000
  • actual direct labour hours worked – 7,500
  • budgeted overhead expenditure – £104,000
  • actual overhead expenditure – £112,500

What is the amount of the overhead over / under recovery?

Select ONE answer:

  1. £7,500 under-recovered
  2. £8,500 over-recovered
  3. £8,500 under-recovered
  4. £15,000 under-recovered

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct – £112,500 – £104,00 + ((£104,000 / 8,000) * (8,000 – 7,500))

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Accounting Multiple Choice Question – 4 November 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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A product manufactured by Alex Trading plc uses two processes (process 1 followed by process 2).

What is the full cost of the materials used in process 2?

Select ONE answer:

  1. the cost of materials added in process 2
  2. the cost of materials used in process 1 and materials added in process 2
  3. the cost of materials, labour, and overhead transferred from process 1
  4. the cost of materials, labour and overhead transferred from process 1 plus the cost of materials added in process 2

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct

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This work is licensed under a Creative Commons Attribution 4.0 International License.

Accounting Multiple Choice Question – 20 October 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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The following financial data applies to Alex Trading Ltd.

  • budgeted labour hours – 10,000 hours
  • actual labour hours – 9,500 hours
  • budgeted overheads – £150,000
  • actual overheads – £160,000

What is the amount of overhead under-absorbed?

Select ONE answer:

  1. £7,500
  2. £8,000
  3. £10,000
  4. £17,500

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct – £150,000 / 10,000 = £15 * 500 = £7,500 + £10,000 extra overhead

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.