F2 (MA/FMA) – Chapter 7a – PART C – CBE MCQs – ACCA

These are ACCA F2 (MA/FMA) Management Accounting MCQs for Part-C of the Syllabus “Cost accounting methods and systems”.

These MCQs are designed in a way that students could better understand the exam format and get used to practice online. This approach will reduce exam stress and enable students to prepare better.

We request the students, Not to solve the MCQs until they have learned and finished the entire F2 (MA/FMA) Management Accounting Chapter 7a – Accounting for overheads and Syllabus Area Part-C “Cost accounting methods and systems”.

All the questions are compulsory, so do not skip any.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course: ACCA – Associations of Chartered Certified Accountants
Fundamental Level: Knowledge, FIA – Foundation in Accounting
Subject: Management Accounting
Paper: F2 – MA/FMA
Chapter: Accounting for overheads
Chapter Number: 7a of the Practice and Exam Kit
Syllabus Area: C – Cost accounting methods and systems
Questions Type: CBE MCQs
Exam Section Type: Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part C of the Syllabus; Cost accounting methods and systems of ACCA F2 (MA/FMA) Management Accounting Module.

Time

These multiple-choice questions (MCQs) are not timed, allowing students to solve them without feeling any pressure and to pay proper attention to the questions.

Result

Students can see their result at the end of the Quiz. They can also be able to see the number of correct and wrong questions. Moreover, the explanation of wrong questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “(select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.


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F2 - Chapter 7a - Part A - MCQs

Course: ACCA - FIA
Subject: F2 (MA/FMA) Management Accounting
Chapter: 7a - Accounting for overheads
Syllabus Area: C - Cost accounting methods and systems
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

  1. If you are using mobile, turn on the mobile rotation and solve the MCQs on wide screen for better experience.

REQUEST

  1. Please rate the quiz and give us feedback once you completed the quiz.
  2. Share with ACCA students on social media such as, Facebook Groups, Whatsapp, Telegram, etc.

1 / 26

A company absorbs overheads on machine hours. In a period, actual machine hours were 22,435, actual overheads were $496,500 and there was over absorption of $64,375.

What was the budgeted overhead absorption rate per machine hour (to the nearest $)?

$ ________

2 / 26

An accountant is using the repeated distribution method to reapportion service department costs. The following table shows the work she has done so far. Figures that are yet to be calculated are shown as “???”

Production department Production department Service department Service department
1 2 X Y
$ $ $ $
Apportioned and allocated Production overheads 60,000 80,000 20,000 10,000
Service department X 8,000 10,000 –20,000 2,000
Service department Y 7,200 4,200 600 –12,000
Service department X ??? ??? –600
Total production overhead       ???             ???             0                    

What is the total production overhead for production department 1 after the remaining reapportionment of the overheads of service department X?

3 / 26

Which TWO of the following statements about predetermined overhead absorption rates are true?

4 / 26

A company manufacturers two products, X and Y, in a factory divided into two production cost centres, Primary and Finishing. The following budgeted data are available:

Cost centre

 Primary Finishing
Allocated and apportioned fixed overhead costs $96,000 $82,500
Direct labour minutes per unit:
–     Product X 36 25
–     Product Y 48 35

Budgeted production is 6,000 units of product X and 7,500 units of product Y. Fixed overhead costs are to be absorbed on a direct labour hour basis.

What is the budgeted fixed overhead cost per unit for product Y?

5 / 26

Factory overheads can be absorbed by which of the following methods?

  1. Direct labour hours
  2. Machine hours
  3. As a percentage of prime cost
  4. $x per unit

6 / 26

The production overhead control account for R Co at the end of the period looks like this.

Production overhead control account

$ $
Stores control 22,800 Work in progress 404,800
Wages control 180,400 Statement of profit or loss 8,400
Expense creditors 210,000
413,200 413,200

Which TWO of the following statements are correct?

7 / 26

Which of the following would be the most appropriate basis for apportioning machinery insurance costs to cost centres within a factory?

8 / 26

The following data is available for a paint department for the latest period.

Budgeted production overhead $150,000
Actual production overhead $150,000
Budgeted machine hours 60,000
Actual machine hours 55,000

Which of the following statements is correct?

9 / 26

A company has the following actual and budgeted data for year 4.

Budget Actual
Production 8,000 units 9,000 units
Variable production overhead per unit $3 $3
Fixed production overheads $360,000 $432,000
Sales 6,000 units 8,000 units

Overheads are absorbed using a rate per unit, based on budgeted output and expenditure.

What was the fixed production overhead absorbed amount during year 4? $_________

10 / 26

Budgeted information relating to two departments in a company for the next period is as follows.

Department Production overhead Direct material cost Direct labour cost Direct labour hours Machine hours
$ $ $
1 27,000 67,500 13,500 2,700 45,000
2 18,000 36,000 100,000 25,000 300

Individual direct labour employees within each department earn differing rates of pay, according to their skills, grade and experience.

What is the most appropriate production overhead absorption rate for department 1?

11 / 26

A company has over-absorbed fixed production overheads for the period by $6,000. The fixed production overhead absorption rate was $8 per unit and is based on the normal level of activity of 5,000 units. Actual production was 4,500 units.

What was the actual fixed production overheads incurred for the period?

12 / 26

A company has the following actual and budgeted data for year 4.

Budget Actual
Production 8,000 units 9,000 units
Variable production overhead per unit $3 $3
Fixed production overheads $360,000 $432,000
Sales 6,000 units 8,000 units

Overheads are absorbed using a rate per unit, based on budgeted output and expenditure.

Using the drop down list select, how much the fixed production overhead was under or over absorbed.

13 / 26

A company uses standard absorption costing to value inventory. Its fixed overhead absorption rate is $12 per labour hour and each unit of production should take four hours. In a recent period where there was no opening inventory of finished goods, 20,000 units were produced using 100,000 labour hours. 18,000 units were sold. The actual profit was $464,000.

What profit would have been earned under a standard marginal costing system?

14 / 26

A company uses an overhead absorption rate of $3.50 per machine our, based on 32,000 budgeted machine hours for the period. During the same period the actual total overhead expenditure amounted to $108,875 and 30,000 machine hours were recorded on actual production.

By how much was the total overhead under or over absorbed for the period?

15 / 26

Budgeted information relating to two departments in a company for the next period is as follows.

Department Production overhead Direct material cost Direct labour cost Direct labour hours Machine hours
$ $ $
1 27,000 67,500 13,500 2,700 45,000
2 18,000 36,000 100,000 25,000 300

Individual direct labour employees within each department earn differing rates of pay, according to their skills, grade and experience.

What is the most appropriate production overhead absorption rate for department 2?

16 / 26

A factory consists of two production cost centres (P and Q) and two service cost centres (X and Y). The total allocated and apportioned overhead for each is as follows:

P

Q

X

Y

$95,000

$82,000

$46,000

$30,000

It has been estimated that each service cost centre does work for the other cost centres in the following proportions:

P Q X Y
Percentage of service cost centre X to 40 40 – 20
Percentage of service cost centre Y to 30 60 10 –

After the reapportionment of service cost centre costs has been carried out using a method that fully recognises the reciprocal service arrangements in the factory, what is the total overhead for production cost centre P?

17 / 26

The following extract of information is available concerning the four cost centres of EG Co.

Production cost centres Service cost center
Machinery Finishing Packing Canteen
Number of direct employees 7 6 2 –
Number of indirect employees 3 2 1 4
Overhead allocated and apportioned $28,500 $18,300 $8,960 $8,400

The overhead cost of the canteen is to be re-apportioned to the production cost centres on the basis of the number of employees in each production cost centre.

After the re-apportionment, what is the total overhead cost of the packing department, to the nearest $?

18 / 26

A company absorbs fixed production overheads in one of its departments on the basis of machine hours. There were 100,000 budgeted machine hours for the forthcoming period. The fixed production overhead absorption rate was $2.50 per machine hour.

During the period, the following actual results were recorded:

Standard machine hours 110,000
Fixed production overheads $300,000

What was the fixed production overhead under/over absorption amount?

19 / 26

Budgeted overheads $690,480
Budgeted machine hours 15,344
Actual machine hours 14,128
Actual overheads $679,550

Based on the data above, what is the machine hour absorption rate (to the nearest $)?

20 / 26

Which of the following is correct when considering the allocation, apportionment and reapportionment of overheads in an absorption costing situation?

21 / 26

CTF Co has two service centres serving two production departments. Overhead costs apportioned to each department are as follows.

Production
departments		 Service
centres
Mixing
$		 Stirring
$		 Stores
$		 Canteen
$
Allocated and apportioned overheads 216,400 78,800 181,600 47,200
Estimated work done by the service
centres for other departments
     Stores 50% 30% – 20%
     Canteen 45% 40% 15% –

The business uses the direct method of apportionment.

After the apportionment of the service centres to the production departments, what will the total overhead cost be for the mixing department?

22 / 26

A company uses a blanket overhead absorption rate of $5 per direct labour hour. Actual overhead expenditure in a period was as budgeted.

The under/over absorbed overhead account for the period have the following entries:

Production overhead control account

DR CR
$ $
 Production overhead 4,000 Profit or loss account 4,000
4,000 4,000

Which of the following statements is true?

23 / 26

CTF Co has two service centres serving two production departments. Overhead costs apportioned to each department are as follows.

Production
departments		 Service
centres
Mixing
$		 Stirring
$		 Stores
$		 Canteen
$
Allocated and apportioned overheads 216,400 78,800 181,600 47,200
Estimated work done by the service
centres for other departments
     Stores 50% 30% – 20%
     Canteen 45% 40% 15% –

The business uses the step down method of apportionment.

After the apportionment of the service centres to the production departments, what will the total overhead cost be for the mixing department?

24 / 26

Actual overheads $496,980
Actual machine hours 16,566
Budgeted overheads $475,200

Based on the data above, and assuming that the budgeted overhead absorption rate was $32 per hour, what were the budgeted number of hours (to the nearest hour) budgeted to be worked?

______ hours

25 / 26

Consider the following statements, regarding the reapportionment of service cost centre overheads to production cost centres, where reciprocal services exist.

Which TWO statements are correct?

26 / 26

Over-absorbed overheads occur when ________________

Your score is

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