1. Indirect costs can be allocated to a cost centre if they: A. Can be identified wholly with the cost centre Can be identified partially with the cost centre C. Can be apportioned to the cost centre B. D. Can be traced directly to the cost unit
1. Indirect costs can be allocated to a cost centre if they: A. Can be identified wholly with the cost centre Can be identified partially with the cost centre C. Can be apportioned to the cost centre B. D. Can be traced directly to the cost unit
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 12MC: Which statement is correct? A. Activity-based cost systems are less costly than traditional cost...
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![1. Indirect costs can be allocated to a cost centre if they:
A. Can be identified wholly with the cost centre
B. Can be identified partially with the cost centre
C. Can be apportioned to the cost centre
D. Can be traced directly to the cost unit
2. Absorption costing is a reliable and accurate method for predicting the total cost
per unit.
A. True
B. False
3. The reason for charging indirect costs to cost centres is to:
A. Calculate the cost of direct materials
B. Calculate the cost of direct labour
C. Allow overheads to be charged to cost units
D. Allow overheads to be charged to expenses
4. In what circumstances might a company be prepared to price a special contract
at less than its relevant cost?
A. When there are signs of improved market conditions.
B. In the expectation that additional profitable orders will be placed by the same customer.
C. When sales of other products will not increase.
D. When the company is operating at almost full capacity.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6bbd78e4-7c8b-48c2-af98-2b069286f0ae%2F3c6f9430-fe01-4bea-bd4c-5ebda2bda6a5%2Fo0rn4zp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. Indirect costs can be allocated to a cost centre if they:
A. Can be identified wholly with the cost centre
B. Can be identified partially with the cost centre
C. Can be apportioned to the cost centre
D. Can be traced directly to the cost unit
2. Absorption costing is a reliable and accurate method for predicting the total cost
per unit.
A. True
B. False
3. The reason for charging indirect costs to cost centres is to:
A. Calculate the cost of direct materials
B. Calculate the cost of direct labour
C. Allow overheads to be charged to cost units
D. Allow overheads to be charged to expenses
4. In what circumstances might a company be prepared to price a special contract
at less than its relevant cost?
A. When there are signs of improved market conditions.
B. In the expectation that additional profitable orders will be placed by the same customer.
C. When sales of other products will not increase.
D. When the company is operating at almost full capacity.
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