Overhead Costing MCQs

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on July 22, 2022

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.

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Frequently Asked Questions

What is Overhead Costing?

Overhead is the cost incurred in the course of making a product, providing a service, or running a department, but which cannot be traced directly and in full to the product, service, or department.

What are overhead expenses?

Fixed overhead includes expenses that are the same amount consistently over time. These can include rent and Depreciation on Fixed Assets. Variable overhead expenses include costs that may fluctuate over time such as shipping costs.

What are overhead expenses?

What are overhead expenses?

What would not be used as the basis for allocating expenses to departments?

E-mail would not be used as the basis for allocating expenses to the department.

What is an example of overhead cost in accounting?

One example of an overhead cost in accounting is Depreciation. This is the cost incurred to gradually wear out or use up a fixed asset like a machine over its useful life. Other examples of overhead costs include insurance, property taxes, and rent. Generally, overhead costs cannot be directly linked to the production of a good or service. Instead, they are incurred to run the business as a whole.

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®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, 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, or check out his speaker profile on the CFA Institute website.

6 thoughts on "Overhead Costing MCQs"

    1. 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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