Accounting Treatment

Question 1

What’s the appropriate accounting system to deal with:
Manufacturing production process with high overhead sand set up costs?

A - Absorption costing using labour hrs
B - marginal costing
C - Activity based costing
D - absorption costing using machine hrs

Answer 1

C

Question 2

What’s the appropriate accounting system to deal with:
Labour intensive manufacturing industry

A - absorption costing using labour hrs
B - marginal costing
C - activity based costing
D - absorption costing using machine hrs

Answer 2

A

Question 3

What’s the appropriate accounting system to deal with:
Budgeting for a manufacturing organisation where future output level is very uncertain

A - absorption costing using labour hrs
B - marginal costing
C - activity based costing
D - absorption costing using machine hrs

Answer 3

B

Question 4

What’s the appropriate accounting system to deal with:
Machine intensive production process with unknown output levels and long production units

A - absorption costing using labour hrs
B - marginal costing
C - activity based costing
D - absorption costing using machine hrs

Answer 4

D

Question 5

What’s the appropriate accounting system to deal with:
Employers NI for admin staff

A - Activity based charge to production cost centres
B - allocate to admin overheads
C - direct costs
D - allocate to finance overheads
E - allocate to setting and distribution overheads
F - allocate to production overheads

Answer 5

B

Question 6

What’s the appropriate accounting system to deal with:
Material usage for production

A - Activity based charge to production cost centres
B - allocate to admin overheads
C - direct costs
D - allocate to finance overheads
E - allocate to setting and distribution overheads
F - allocate to production overheads

Answer 6

C

Question 7

What’s the appropriate accounting system to deal with:
Rent for office equipment e.g printer

A - Activity based charge to production cost centres
B - allocate to admin overheads
C - direct costs
D - allocate to finance overheads
E - allocate to setting and distribution overheads
F - allocate to production overheads

Answer 7

B

Question 8

What’s the appropriate accounting system to deal with:
Cost of stores department

A - Activity based charge to production cost centres
B - allocate to admin overheads
C - direct costs
D - allocate to finance overheads
E - allocate to setting and distribution overheads
F - allocate to production overheads

Answer 8

A

Question 9

What’s the appropriate accounting system to deal with:
Cost of productive time for production overheads

A - Activity based charge to production cost centres
B - allocate to admin overheads
C - direct costs
D - allocate to finance overheads
E - allocate to setting and distribution overheads
F - allocate to production overheads

Answer 9

C

Question 10

What’s the appropriate accounting system to deal with:
Cost of idle time for production overheads

A - Activity based charge to production cost centres
B - allocate to admin overheads
C - direct costs
D - allocate to finance overheads
E - allocate to setting and distribution overheads
F - allocate to production overheads

Answer 10

F

Question 11

What’s the appropriate accounting system to deal with:
Direct labour idle time

A - Direct production cost
B - allocate to production overheads
C - apportion to indirect costs of production and admin
D - activity based charge to units of production
E - allocate to indirect admin costs
F - allocate to indirect finance costs

Answer 11

B

Question 12

What’s the appropriate accounting system to deal with:
Raw materials usage

A - Direct production cost
B - allocate to production overheads
C - apportion to indirect costs of production and admin
D - activity based charge to units of production
E - allocate to indirect admin costs
F - allocate to indirect finance costs

Answer 12

A

Question 13

What’s the appropriate accounting system to deal with:
Interest on bank loan

A - Direct production cost
B - allocate to production overheads
C - apportion to indirect costs of production and admin
D - activity based charge to units of production
E - allocate to indirect admin costs
F - allocate to indirect finance costs

Answer 13

F

Question 14

What’s the appropriate accounting system to deal with:
Repairs to roof of factory

A - Direct production cost
B - allocate to production overheads
C - apportion to indirect costs of production and admin
D - activity based charge to units of production
E - allocate to indirect admin costs
F - allocate to indirect finance costs

Answer 14

C

Question 15

What’s the appropriate accounting system to deal with:
Costs of running stores department

A - Direct production cost
B - allocate to production overheads
C - apportion to indirect costs of production and admin
D - activity based charge to units of production
E - allocate to indirect admin costs
F - allocate to indirect finance costs

Answer 15

D

Question 16

What’s the appropriate accounting system to deal with:
Interest on machine acquired on lease

A - Direct production cost
B - allocate to production overheads
C - apportion to indirect costs of production and admin
D - activity based charge to units of production
E - allocate to indirect admin costs
F - allocate to indirect finance costs

Answer 16

F

Question 17

What’s the appropriate accounting system to deal with:
Direct labour productive time

A - Direct production cost
B - allocate to production overheads
C - apportion to indirect costs of production and admin
D - activity based charge to units of production
E - allocate to indirect admin costs
F - allocate to indirect finance costs

Answer 17

A

Question 18

What’s the appropriate accounting system to deal with:
Maintenance of factory machinery

A - Direct production cost
B - allocate to production overheads
C - apportion to indirect costs of production and admin
D - activity based charge to units of production
E - allocate to indirect admin costs
F - allocate to indirect finance costs

Answer 18

B

Question 19

What’s the appropriate accounting system to deal with:
Employers pension contribution for sales staffs

A - Direct cost 
B - allocate to production overheads 
C - allocate to selling and distribution overheads 
D - capital expenditure 
E - allocate to marketing costs
F - allocate to finance costs

Answer 19

C

Question 20

What’s the appropriate accounting system to deal with:
Product design royalties

A - Direct cost 
B - allocate to production overheads 
C - allocate to selling and distribution overheads 
D - capital expenditure 
E - allocate to marketing costs
F - allocate to finance costs

Answer 20

A

Question 21

What’s the appropriate accounting system to deal with:
Repairs to factory roof

A - Direct cost 
B - allocate to production overheads 
C - allocate to selling and distribution overheads 
D - capital expenditure 
E - allocate to marketing costs
F - allocate to finance costs

Answer 21

B

Question 22

What’s the appropriate accounting system to deal with:
Costs of maintaining production equipment

A - Direct cost 
B - allocate to production overheads 
C - allocate to selling and distribution overheads 
D - capital expenditure 
E - allocate to marketing costs
F - allocate to finance costs

Answer 22

B

Question 23

What’s the appropriate accounting system to deal with:
Sick pay for production operatives

A - Direct cost 
B - allocate to production overheads 
C - allocate to selling and distribution overheads 
D - capital expenditure 
E - allocate to marketing costs
F - allocate to finance costs

Answer 23

B

Question 24

Describe production overheads

Answer 24

An indirect expense associated with the process of producing the goods or services.

Question 25

What is absorption costing

Answer 25

A system that attempts to determine a full cost for each unit of output. It includes both both direct and indirect costs

Question 26

What is marginal costing

Answer 26

A costing system categorises costs according to their cost behaviour and then divides them into Variable and fixed costs

Question 27

What is activity based costing

Answer 27

Similar to absorption costing but deals mainly with the indirect costs.
Involves examining the costs to determine what causes them and using this info to charge the costs to the units of output.