Practice Test

Q1) Process costing is that form of operation costing where ________ goods are produced. Show Answer

Q2) Under Process costing losses have to be classified into ________ & _________ Show Answer

Q3) Under process costing, output of one process account becomes the raw materials for subsequent process Show Answer

Q4) ____ is that part of process loss which cannot be controlled or reduced inspite of all the effort taken by the management. Show Answer

Q5) Under process costing, when the actual loss is less than normal loss there is an _____ Show Answer

Q6) Abnormal loss is always valued at _____ & _____ to process A/c. Show Answer

Q7) Abnormal gain is always valued at ____ & ____ to Process A/c. Show Answer

Q8) _______ is that part of process loss which can be controlled if suitable step are taken by management. Show Answer

Q9) Under process costing when actual loss is more than normal loss there is an _______. Show Answer

Q10) Closing stock of each Process Stock A/c is valued at _________ of respective Process A/c. Show Answer

Q11) ________ is a part of the process loss which is caused under normal circumstances. Show Answer

Q12) ________ is a method of costing used to ascertain the cost of the product at end of each process. Show Answer

Q13) _________ is a product derived from the main raw material which is having equal importance like another product. Show Answer

Q14) _______ is an additional product manufactured along with the main product which has insignificant value. Show Answer

Q15) Abnormal loss and Abnormal gain should be valued at ________ Show Answer

Q16) In following costing, direct cost involves more than indirect cost _______ Show Answer

Q17) Normal loss is calculated as a percentage of ________ of the respective process. Show Answer

Q18) Under process costing when actual loss is more than normal loss then there is ________ Show Answer

Q19) Under process costing, when actual loss is less than normal loss then there is ________ Show Answer

Q20) Cost per unit of Process A/c is calculated with the help of _______ formula. Show Answer

Q21) Under process costing, output of one process account becomes the finished goods for subsequent process. Show Answer

Q22) Under process costing , cost of product is calculated at the end of each process Show Answer

Q23) Process costing is that form of operation costing where standardized goods are produced. Show Answer

Q24) Job costing and process costing both are different. Show Answer

Q25) In process costing direct cost involved is more than indirect cost. Show Answer

Q26) Normal loss should be calculated at a certain percentage of input introduced to the respective process. Show Answer

Q27) Scrap loss (Normal loss) may or may not have scrap value. Show Answer

Q28) By-product has significant value. Show Answer

Q29) Joint-product has insignificant value. Show Answer

Q30) Abnormal gain arises due to efficiency of the production department. Show Answer

Q31) 160 units are introduced into a process at a cost of Rs. 2,400. The total additional expenditure incurred by the process is Rs. 1,440 of the units introduced 10% are normal wastage in the course of manufacture. The wastage units posses a value as scrap of Rs. 15 each. Due to abnormal causes only 128 units are produced. Calculate Abnormal loss. Show Answer

Q32) From the following details find out % of N/L and cost per unit of Process ‘C’ A/c & also Net profit. Output from process ‘B’ A/c Units 18,240 (Rs. 98,526)
Additional expenditure incurred Rs. 41,010
Scrap (Units) ?
Scrap Value Rs. 1.00 per unit
Final product sold Rs. 10.00 per unit
Selling price 20% on sales Show Answer

Q33) From the details given, find out Net profit:
The output 18,400 units were produced by Process ‘B’ @ Rs. 10 & which were transferred to the warehouse. 16,000 units of the finished products were sold @ Rs. 15 per unit. Selling & Distribution expenses were Rs. 2 per unit. There were no opening stocks of any type. Show Answer

Q34) Find out Raw Material introduced (Units) in Process I A/c:
Normal Loss 5%
Abnormal Loss (units) 50
Output (units) 900 Show Answer

Q35) Find out Raw Materials introduced (units) in process I A/c:
Normal Loss 10%
Abnormal Gain 100 units
Outputs (units)1,900 Show Answer

Q36) Find out Raw Materials introduced (units) in Process I A/c:
Normal Loss in Process 15% & Process II 10%
Actual output in Process- II 1500 units
Abnormal Loss in Process-II 30 units
Abnormal Loss in Process-I 200 units. Show Answer

Q37) Process costing is applied when Show Answer

Q38) Which of the following does not use process costing? Show Answer

Q39) Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments? Show Answer

Q40) Which of the following statements is false? Show Answer

Q41) Process Cost is based on the concept of Show Answer

Q42) Normal Loss is equal to Show Answer

Q43) Normal Output is equal to Show Answer

Q44) Unit Cost is equal to Show Answer

Q45) Abnormal Loss is equal to Show Answer

Q46) Abnormal Gains are equal to Show Answer

Q47) 12,000 kg of a material were input to a process in a period. The normal loss is 10% of input. There is no opening or closing work-in-progress. Output in the period was 10,920 kg. What was the abnormal gain/loss in the period? Show Answer

Q48) Wastage of a raw material during a manufacturing process is 20% of input quantity. What input quantity of raw material is required per kg of output? Show Answer

Q49) 400 litres of a chemical were manufactured in a period. There is a normal loss of 25% of the material input into the process. An abnormal loss of 5% of material input occurred in the period. How many litres of material (to the nearest litre) were input into the process in the period? Show Answer

Q50) A company uses process costing to value its output. The following was recorded for the period: Input materials 2,000 units at Rs. 4.50 per unit
Conversion costs Rs. 13,340
Normal loss 5% of input valued at Rs. 3 per unit
Actual loss 150 units
There were no opening or closing stocks.
What was the valuation of one unit of output to one decimal place? Show Answer

Q51) A company uses process costing to value its output and all materials are input at the start of the process.
The following information relates to the process for one month:
Input 3,000 units
Opening stock 400 units
Losses 10% of input is expected to be lost
Closing stock 200 units
How many good units were output from the process if actual losses were 400 units? Show Answer

Q52) The cost of production of 40 units in Process I consisting of materials Rs. 1,500; Labour Rs. 1,300 and Overhead Rs. 164. The normal waste is 5% of input. Show Answer

Q53) Particulars for Process A,
Materials (200 Units) Rs. 4,000
Labour Rs. 3,000
Indirect Expenses Rs. 2,000
Normal wastage is 5% of the input. One unit of wastage is sold at Rs. 16.50 each. Show Answer

Q54) In process Y, 75 units of a commodity were transferred from process X at a cost of Rs. 1,310. The labour and overhead expenses incurred by the process were Rs. 190. 20% of the units entered are normally lost and sold @ Rs. 4 per unit. The output of the process was 70 units. Show Answer

Q55) Costs incurred prior to the point of separation of the joint or by-products are termed as Show Answer

Q56) When a single manufacturing process yields two products, one of which has a relatively high sales value compared to the other, the two products are respectively known as Show Answer

Q57) A process gives rise, incidentally, to an item of low value, which is called Show Answer

Q58) Byproducts and main products are differentiated by Show Answer

Q59) A Petroleum company assigns certain value based on the calorific value to each petroleum product, and these values become the basis of apportionment of joint cost among petroleum products. This is an example of Show Answer

Q60) Under this method of allocation of joint costs, even high quality items may have a lower price Show Answer

Q61) This is also known as 'Weighted Average Cost Method. Show Answer

Q62) Under this method of allocation of joint costs, higher-priced items are charged more costs Show Answer

Q63) This method of allocation of joint costs is useful when the products are not saleable at the spilt-off stage without further processing Show Answer

Q64) For the purpose of allocating joint costs to joint products, the sale price at point of sale, reduced by costs to complete after split-off, is assumed to be equal to Show Answer

Q65) Joint Costs are normally allocated on the basis of relative Show Answer

Q66) Net Realizable Value is defined as Show Answer

Q67) Joint Cost are allocated according to sales value of individual products under Show Answer

Q68) Under the Market Value Method, Joint Costs are allocated according to of individual products Show Answer

Q69) Under the Average Unit Cost Method of apportionment of joint costs, the cost per unit of each product is Show Answer

Q70) All costs incurred beyond the split off point that are assignable to one or more individual products are called Show Answer

Q71) The amount of joint costs allocated to product B on Sales Value method will be Show Answer

Q72) The amount of joint costs allocated to product C on Physical Unit method will be Show Answer

Q73) The sale value of residue etc. is credited to the Process Account. Show Answer

Q74) Invisible waste has no sale value. Show Answer

Q75) The sale value of scrap, is always more than the cost of production, leading to abnormal gains. Show Answer

Q76) Normal Loss is treated as normal cost of production. Show Answer

Q77) The actual sale of units of scrap representing normal loss is credited to the Profit & Loss A/c. Show Answer

Q78) The sale value of the units of abnormal loss is credited to the Process A/c. Show Answer

Q79) The sale value of units of abnormal gains is debited to the abnormal gains account and credited to the normal loss account. Show Answer

Q80) The cost of units of abnormal loss is credited to the Process account. Show Answer

Q81) The cost of units of abnormal gain is debited to the Process account. Show Answer

Q82) The sale value of units of abnormal loss is credited to the abnormal loss account. Show Answer

Q83) Abnormal loss is charged to costing profit and loss account. Show Answer

Q84) Costs are accumulated by time period in a process costing system. Show Answer

Q85) Process costing is ordinarily applied where all the operations are performed in one department. Show Answer

Q86) Process Costing is used in case of industries where work is done against specific order. Show Answer

Q87) The cost of good units is reduced by the abnormal gain in process costing. Show Answer

Q88) When two or more inputs are used together to produce a product, such inputs are termed as joint products. Show Answer

Q89) When two or more products are produced together, products of greater importance are termed as by-products. Show Answer

Q90) The costs incurred after the point of separation of the joint-products are termed as Joint Costs. Show Answer

Q91) The physical unit method of allocation of joint costs gives equal importance and value to all the joint products. Show Answer

Q92) In Contribution Margin Method, the variable costs are apportioned over the joint products on the basis of the contribution ratios. Show Answer

Q93) Under the Market Value method, the joint costs up-to the point of sale are apportioned in the ratio of sale values of joint products at such point. Show Answer

Q94) In case by-products are produced, the net realizable value of by-products is credited to the cost of production of the main product. Show Answer

Q95) A byproduct has a minimal sales value. Show Answer

Q96) Joint products are of unequal importance. Show Answer

Q97) The proportion of joint products can be changed at the will of the management. Show Answer

Q98) Joint products are produced from the different processes. Show Answer

Q99) Split off point refers to the point at which joint products are sold. Show Answer

Q100) Joint costs refer to the total cost incurred upto the point when the products are sold. Show Answer

Q101) Joint costs = Common materials costs + subsequent processing costs. Show Answer