Overhead Costing MCQs

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on November 16, 2021

Multiple choice questions (MCQs) help students to clarify key concepts and test their knowledge on a particular subject. In this article, we have prepared overhead costing MCQs, which can serve as useful interview and exam preparation.

In this test, each of the 12 MCQs has 4 possible answers, and you need to choose the correct response. If you can answer every question correctly, it will be great preparation for your exams, interviews, and professional work.

1. The wages paid to the maintenance department workers who perform repair work (mainly for the production departments but also on the vehicles in the distribution department) should be charged as:

2. Which of the following costs of management is likely to have the least control?

3. Which of the following costs is most likely to have a cost behavior pattern described as follows: initially, a fixed cost up to an activity level of 1,000 units, with a variable cost thereafter that falls from $0.10 to $0.08 per unit at 2,000 units?

4. Which of the following is most likely to be an allocated production overhead cost to the finishing cost center?

5. Which of the following is a valid classification of the salary paid to the foreman in charge of the packing department?

6. Which of the following methods of charging service cost centers is compatible with controlling the efficiency of the service within the service cost center?

7. Non-production overheads are usually omitted from stock valuation for the following reason:

8. Non-production overheads are usually omitted from stock valuation for the following reason:

9. If a business needs to absorb an overhead for a foreman's salary, the most suitable basis for absorption is:

10. Absorption of production overhead cost into unit cost on a marginal cost basis is unacceptable in which one of the following conditions:

11. Which of the following best describes a fixed cost?

12. Which of the following would not cause either an under- or over-absorption of overheads?


True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.

6 thoughts on “Overhead Costing MCQs”

    • Overhead Costing can be tricky to understand, but you can do it! Drop us a line if there is another topic you’d like to see and we’ll try to add it in the future.


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