Process Costing MCQs quiz with answers

1. The monetary value attributed to normal losses in a process should be:

A share of the process cost according to the stage of completion of the losses.

A nill value with no other monetary adjustment under any circumstances.

A full share of process cost on the same as good output.

A nill share of process costs which have been reduced by the scrap value of the normal loss.

2. Details for the past month of a continuous process are:

Opening W.I.P. (400 units) (60% complete)

Closing W.I.P. (600 units) (20% complete)

Unit started 1,000

Unit finished 800

3. An abnormal gain in a process occurs in which of the following situations?

Also Check: Cost of goods sold statement and income statement MCQs

When actual losses are greater than the normal loss level.

When costs are reduced through increased machine speed.

When actual losses are less than the normal level.

When the process output is greater than planned.

4. Where process scrap is recycled for use in conjunction with new material as well as being so externally, which of. the following is most likely to be the value at which is debited to the process?

At the same price as it sold externally.

At the cost of normal losses.

At the cost attached to abnormal losses.

Nil value.

5. Which of the following is the best explanation of the relevance of equivalent production units in process costing?

A means of equalising production charged into stock each period.

The conversion partly completed units into an equivalent number of completed units in order that costs may be shared on an equitable basis.

The expression of losses in terms of an equivalent number of units of good production in order that their value may be calculated.

A means by which the output achieved may be compared with the equivalent quantity budgeted for the period under review.

6. Purchased materials are added in the second department of a three department process, this order does not increase the number of units produced in the second department and would:

Also Check: Material Costing MCQs

Not change the amount transferred to the next department.

Decrease total work in process inventory.

Increase the factory overhead portion of the ending work-in-process inventory.

Increase total unit cost.

7. The physical flow of units into and out of departments is shown on the:

Quantities schedule.

Equnulent production schedule.

Cost of account for schedule.

Cost of Accounted for schedule.

8. Purchased materials are added in the second department of a three-department process; this increases
the number of units produced in the second department and would always:

Change the direct labor cost percentage in the ending work-in-process inventory.

Cause no adjustment to the unit cost transferred in from the first department.

Increase total units costs.

Decrease total ending work-in-process inventory.

9. An equivalent unit of material or conversion cost is equal to:

The amount of material conversion cost necessary to complete one unit of production.

A unit of work-in-process inventory.

The amount of material or conversion cost necessary to start a unit of production into work
in process inventory.

Fifty percent of material or conversion cost of a unit to finished goods inventory (assuming
a linear production pattern).

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