Overhead absorption rate is calculated as: MCQ with Answer and Explanation

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Overhead absorption rate is calculated as:

A. None

B. Budgeted overheads / Actual base

C. Budgeted overheads / Budgeted base

D. Actual overheads / Actual base

Answer: Option C

Solution (By JKSSB Mock Tests)

Overhead absorption rate is usually predetermined based on budgeted figures to absorb overheads into products.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

The 'Return on Investment' (ROI) formula is:

A. Gross profit / Sales

B. Net profit / Sales

C. Sales / Capital employed

D. Net profit / Capital employed

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Correct Answer: Option D

Explanation:
ROI = Net profit before interest and tax / Capital employed, or sometimes PAT/CE. Typically, Net profit / Capital employed.

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Question #2

The 'Government Accounting Standards Advisory Board' (GASAB) was established by:

A. Ministry of Finance

B. Comptroller and Auditor General (CAG) of India

C. ICAI

D. RBI

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Correct Answer: Option B

Explanation:
GASAB is under CAG to formulate accounting standards for government.

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Question #3

In the context of PFMS, the 'Public Accounts Committee' (PAC) examines:

A. The appropriation accounts and the audit reports of the CAG

B. The monetary policy of the RBI

C. The annual budget estimates

D. The tax collection policies

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Correct Answer: Option A

Explanation:
The Public Accounts Committee (PAC) of the Parliament examines the appropriation accounts (showing how grants were spent) and the audit reports submitted by the Comptroller and Auditor General (CAG).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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