Question 1: What do you mean by absorption of overhead? Describe in brief the various methods for absorption of factory overheads?
Question 2: Explain the prime cost method of absorption of the factory overheads. Describe fully and describe the fundamental conditions required for its application.
Question 3: Describe what is meant by cost apportionment and cost absorption. Describe each with two illustrations. Describe the methods of cost absorption and state which process you consider to be the best and explain why?
Question 4: What are the peculiar characteristics of selling and distribution overheads as compared to manufacturing overheads?
Question 5: Why do you consider departmentalization of overheads required?
Question 6: Describe the techniques of absorption of selling and distribution overheads.
Question 7: How do you deal with the given in cost accounts:
a) Advertising
b) Research and development cost
c) Bad debts
d) Rent of factory buildings
Question 8: Interest is a factory which can’t be disregarded by management. Comment on this statement.