Which TWO of the following are items of capital expenditure?
A. Purchase of vehicle
B. Factory extension
C. Repairs to roof
D. Purchase of inventory
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Which of the following businesses would NOT use service costing?
A. Bank
B. Hospital
C. Supermarket
D. Hairdresser
When using absorption costing, it is necessary to apportion overheads, which should be shared across departments. Which of these shows the most appropriate apportionment basis for the relevant overhead?
A. Overhead: Lighting - Basis for apportionment: Floor area
B. Overhead: Heating - Basis for apportionment: Number of employees
C. Overhead: Property insurance - Basis for apportionment: Number of employees
D. Overhead: Machinery maintenance - Basis for apportionment: Floor area
The costs of the maintenance department and canteen need to be reapportioned to Production department 1 and Production department 2. The total costs of each department are as follows:The canteen caters for employees of the maintenance department at a cost of $32,700. The remainder is split between Production department 1 ($35,000) and Production department 2 ($57,300). The maintenance department costs are split 2:1 between Production department 1 and Production department 2. What is the total overhead cost charged to Production department 1?
A. $206,800
B. $93,200
C. $107,700
D. $106,800
Which of the following would be the most appropriate basis of overhead absorption for an organisation that provides telephone support for IT questions?
A. Number of clients
B. Labour hours
C. Machine hours
D. Staff numbers