Cost accounting
MCQ of Process costing
For students of Bcom/CA/CAT/NET
1: The cost of previous department is a part of
A. Transferred-in costs
B. Transferred-out costs
C. FIFO costs
D. LIFO costs
Answer:A
2: The total costs incur in a production process, is divided by total number of output units to calculate the
A. cost of indirect labor
B. cost of direct labor
C. cost of direct material
D. unit costs
Answer:D
3: The first step in process costing system is to
A. Summarize flow of output
B. Compute output in units
C. Summarize total costs
D. Compute cost for each equivalent unit
Answer:А
4: The costs that are incurred in last department, where the product has been processed and will be carried to next department for further processing are called
A. Partial work costs
B. Transferred-in costs
C. Transferred-out costs
D. Weighted average costs
Answer:B
5: In process costing method, when the work done in current accounting period and beginning inventory before current accounting period, is classified as to
A. Partial inventory costing method
B. Current period inventory method
C. Last-in, first-out method
D. First-in, first-out method
Answer:D
6.The process costing system is best suited for
A) Industries where different types of products are manufactured
B) Industries where homogeneous products are produced
C) Service industries only
D) All of the above
Correct Answer: B
7.Which is a feature of Process Costing?
A) Production against customer orders
B) Different types of products produced
C) Production is for stock
D) Non of the above
Correct Answer: C
8.Products, each of significant sales value produced simultaneously from the same raw material for some other process
A) By-products
B)Joint products
C)Common Products
D) Co-products
Correct Answer: B
9.When the actual loss is more than the estimated loss, the difference between the two is considered to be
A) Abnormal gain C) Normal loss
B) Abnormal loss D) Normal gain
Correct Answer: B)
10.Wood pieces left out in furniture industry should be treated as
A) By-products
B)Joint products
C)Scrap
D) Co-products
Answer: C) scrap
11.The most important criteria for distinguishing between joint products and by-products
A) Cost
B) Profit
C) Sales value
D) Demand
Answer: B) Sales value
12.Which is not a feature of joint products?
A) Produced from the same raw materials
B) Produced simultaneously from same process
C) Can be sold without further processing
D) Comparatively of equal importance
Correct Answer: c
13.Which is an example of joint products?
A) White flour and brown flour in flour mill
B) Bread, cake and biscuits in bakery
C) Sugar and molasses in sugar mill
D) Non of the above
Answer: A) White flour and brown flour in flour mill
14.Two or more products of equal importance simultaneously produced from the same raw materials are called
A) Joint products C) Co products
B) By products. D)Non of the above
Correct Answer: A) Joint products
15.One or more products of small value produced simultaneously with a product of greater value is called
A) Joint products C) Co products
B) By products. D)Non of the above
Answer: B) By products
16. Process loss that occurs under inefficient working condition and is controlled is called
A) Abnormal loss
B) Uncontrollable Loss
C) Normal loss
D) Non of the above
Correct Answer: A) Abnormal loss
17. Which among the following statements is true by products?
A) Two or more products of equal importance
B) Secondary Products incidentally produced
C) Produced in different product line
D) All of the above
Correct Answer: B) Secondary Products incidentally produced
18. In an oil refinery, petrol and diesel are considered
A) Joint products
B) Co products
C) By products
D) Non of the above
Correct Answer: A) Joint products
19._____Process loss should be transferred to Costing Profit and Loss Account.
A) Abnormal
B) Normal
C) Actual
D) D) All of these
Correct Answer: A) Abnormal
20.Loss arising due to evaporation is considered as ____ in process accounts
A) Abnormal loss
B) Seasonal loss
C) Normal loss
D) Non of the above
Correct Answer: B) Normal loss
21.A process loss that does not affect cost per unit
A) Standard loss
B) Normal loss
C) Abnormal loss
D) Seasonal loss
Correct Answer: c) Abnormal loss
22. In process costing cost are accumulated by_____
A) Batch
B) Job
C) Production order
D)Process
Correct Answer: D) Process
23. Process costing is suitable for___
A) Mass production industries
B) Jobs of long duration
C) Organizations rendering services
D) Production as per customer’s requirements
Correct Answer: A) Mass production industries
24. Abnormal gain in a process is written to be___
A) Credit side of process account
B) Debit side of process account
C) Debit side of Costing P/L Account
D) Non of the above
Correct Answer: B) Debit side of process account
25. Among the following which method of costing computes cost at the end of each process?
A) Job costing
B) Contract costing
C) Process costing
D) Batch costing
Correct Answer: B) Process costing
26. Loss which is unavoidable on account of the nature of the material is called___
A) Uncontrolled C) Abnormal
B) Normal D)None of these
Correct Answer: B) Normal
27. Loss which is avoidable is called
A) Uncontrolled
B) Abnormal
C) Normal
D) None of these
Correct Answer: C) Abnormal
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