Tag: Overhead Absorption

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 – 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 – 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

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Accounting Multiple Choice Question – 13 September 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 Alex Ltd.

  • actual direct labour hours worked – 7,500 hours
  • budgeted direct labour hours – 8,000 hours
  • budgeted overhead expenditure – £104,000
  • overheads under-recovered – £15,000

What is the amount of the actual overhead expenditure?

Select ONE answer:

  1. £89,000
  2. £97,500
  3. £112,500
  4. £119,000

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 – £104,000 / 8,000 hours = £13 * 7,500 hours = £97,500 + £15,000
  4. Not correct

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Accounting Multiple Choice Question – 21 August 2023

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

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Alex plc uses a predetermined direct labour rate of £5.40 per hour to absorb production overhead.

Each unit of product manufactured requires four direct labour hours

The following information is available for a period.

  • actual production overhead – £518,400
  • under-absorbed production overhead – £32,400

What was the actual output of the product in the period?

Select ONE answer:

  1. 22,500 units
  2. 24,000 units
  3. 25,500 units
  4. 30,000 units

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 1

  1. Correct – £518,400 – £32,400 = £486,000 / £5.4 = 90,000 hours / 4 = 22,500 units
  2. Not correct
  3. Not correct
  4. Not correct

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