Indirect Costs Allocation MCQ with Answers PDF Download – Test 128

If an actual indirect cost incurred is $25000 and the indirect cost allocated is $23000, then the over allocated indirect cost would be

1. $48,000
2. −$2000
3. $2,000
4. −$48000

In the linear cost function which is y=a + bx, the objective is to find the

1. values of a and b
2. values of x and y
3. values of a and x
4. values of b and y

An actual cost is subtracted from flexible budget cost to calculate

1. positive cost variance
2. negative cost variance
3. flexible budget variance
4. flexible cost variance

The fourth step in development of operating budget is to

1. identify variable overhead cost
2. compute the per unit rate
3. choose the budgeting period
4. select allocation bases

The capacity utilization of the business, to satisfy average customer demand over a specific period of time is classified as

1. seasonal capacity utilization
2. normal capacity utilization
3. standard capacity utilization
4. theoretical capacity utilization