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This set of Strategic Cost Accounting Multiple Choice Questions & Answers (MCQs) focuses on Strategic Cost Accounting Set 2
Q1 | In order to compute equivalent units of production using the Weighted Average method ofprocess costing, the following equation should be used:
- Equivalent units of beginning work in process + units completed and transferred out
- Equivalent units of beginning work in process + equivalent units of ending work in process
- Units completed and transferred out + equivalent units of ending work in process
- Units completed and transferred out + equivalent units of beginning work in process
Q2 | If beginning work in process is 2,000 units, ending work in process is 1,000 units, and the unitsaccounted for equals 5,000 units, what are the units completed and transferred out?
- 7000
- 6000
- 4000
- 2000
Q3 | One characteristic of products that are mass-produced in a continuous production processis that
- The products are identical or very similar in nature.
- They are grouped in batches.
- They are produced at the time an order is receiv
Q4 | Conversion costs are the sum of:
- Direct materials costs and direct labor costs
- Indirect materials costs and indirect labor costs
- Direct materials costs and overhead costs
- Direct labor costs and overhead costs
Q5 | A production cost report
- Used to record the costs chargeable to a specific job
- Shows only cost data for a production department
- Provides a basis for evaluating the productivity of a department
- Combines process cost and job order costing systems costs
Q6 | Which is not a similarity between job order costing and process costing?
- Methods of assigned costs
- Tracking of direct materials, direct labor and manufacturing overhead
- Accumulating journal entries
- Flow of costs
Q7 | The journal entry that assigns raw materials costs in a process costing system includes
- Debit to raw materials
- Credit to raw materials
- Debit to Accounts Payable
- Credit to Work in Process
Q8 | Calculating equivalent units in a weighted average method:
- The beginning inventory percentage complete is used only for conversion costs
- The beginning inventory percentage complete is used for both material and conversion costs
- The beginning inventory amount is not accounted for
- The beginning inventory amount is used in total
Q9 | in a process costing system, manufacturing overhead is assigned to work in process by
- Department based on actual overhead costs incurred
- Department based on predetermined overhead rates
- Job based on actual overhead costs incurred
- Job based on predetermined overhead rates
Q10 | Which of the following system applies when standard goods are produced under a series ofinter connected operations?
- Job order costing
- Process costing
- Standard costing
- All of the above
Q11 | The process costing system is best suited for
- Industries where different types of products are manufactured
- Industries where homogenous products are manufactured on continuous basis
- Service industry only
- All of the above
Q12 | Which of the following business is likely to adopt a process costing system?
- Plan manufactures
- Construction companies
- Sugar refining
- Printing press
Q13 | Materials labor and overhead costs are traced to processing departments rather than individual products or jobs. This statement is true for
- A job order costing system
- An activity based costing system
- A process costing system
- A variable costing system
Q14 | In process costing system, the materials can be added in
- First department only
- Last department only
- First and last department only
- Any department
Q15 | Which of the following is not relevant to a process costing system?
- Heterogeneous products
- Recitative production
- High production volume
- Low production flexibility
Q16 | Which of the following is not correct about process costing and job order costing?
- Both the system classify materials as direct material and or indirect materials.
- Both the system classify labor ans direct labor and or indirect labor
- Direct materials under job order costing might be indirect under process costing and vice versa.
- Both the systems assigns costs by process.
Q17 | In process costing system, when partially completed units are expressed in terms of fullycompleted units they are known as
- Completed units
- Equivalent units
- Unfinished units
- Transferred units
Q18 | The direct material costing Rs. 4000 has been used in mixing department. The correct journalentry would be
- Direct materials Dr. and work in process-mixing department CR
- Work-in –process-mixing department Dr and Direct materials Cr
- Finished goods DR and Direct materials Cr
- Mixing department Dr and Direct material Cr
Q19 | In a process costing system, the manufacturing overhead (or factory OH) is usually appliedusing
- Predetermined overhead rate
- An actual overhead rate
- A conversion overhead rate
- An indirect labor rate
Q20 | In process costing system, the predetermined overhead rate is computed.
- Only once and used for all the processing department
- Separately for each processing department
- Only for the first processing department where units are started
- Only for the last department where units are completed and transferred to finished goods area.
Q21 | Where the normal loss in a department is identified at the end of process, its cost is :-
- Ignored
- Charged to work in progress ending inventory only
- Charged to units completed and transferred out only
- Charged to work in process ending inventory as well as to units completed and transferred out
Q22 | While preparing the cost of production report of a processing department, use per unit costfrom producing department needs to be adjusted when the
- Normal loss is identified during the process.
- Normal loss is identified at the end of the process
- Abnormal loss is identified during the process
- Abnormal loss is identified at the end of the process.
Q23 | The normal or standard loss in processing department is generally considered
- An avoidable loss
- Un avoidable loss
- An additional loss
- A basic loss
Q24 | A loss in processing departments which can be avoided under normal and efficient working conditions is generally known as
- Normal loss
- Extra loss
- Abnormal loss
- Department loss
Q25 | In process costing the abnormal loss occurred in a production department is
- Charged to finished goods
- Charged to unfinished goods
- Charged to factory overhead
- Ignored