Indirect Costs Allocation MCQ with Answers PDF Download – Test 128

MCQ 636: 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

MCQ 637: 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

MCQ 638: 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

MCQ 639: 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

MCQ 640: 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