Budget Indirect Costs and End of Financial Year Multiple Choice Questions with Answers – PDF Download

MCQ 1: In normal costing, the situation in which the allocated amount of indirect cost is greater than the incurred cost, is considered as:

1. incurred indirect cost
2. over allocated indirect cost
3. applied indirect cost
4. applied direct cost

MCQ 2: An approach which yields the benefits of normal costing and the actual manufacturing overhead is classified as:

1. unadjusted allocation rate approach
2. adjusted budget rate approach
3. unadjusted budget rate approach
4. adjusted allocation rate approach

MCQ 3: The costing and allocating situation, in which the indirect cost allocated amount is less than actually incurred amount is known as:

1. over allocated budget
2. under allocated budget
3. under allocated indirect cost
4. over allocated direct cost

MCQ 4: An allocation approach, in which all the overhead entries are restated using actual cost rates in place of budgeted rates is called:

1. unadjusted budget rate approach
2. adjusted allocation rate approach
3. unadjusted allocation rate approach
4. adjusted budget rate approach

MCQ 5: In a normal accounting period, the allocated amount of indirect cost is $2000 and the actual amount is $2200, it classified as:

1. over allocated budget
2. under allocated budget
3. under allocated indirect cost
4. over allocated direct cost