40+ Process costing MCQ | Cost Accounting MCQs (Free Resource)

Process costing MCQ

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1. Process costing is applied when
(a) small number of different products are manufactured
(b) large number of different products are manufactured
(c) large number of identical products are manufactured
(d) small numbers of customized made-to-order products are manufactured

2. Which of the following does not use process costing?
(a) Oil refining
(b) Distilleries
(c) Sugar
(d) Air-craft manufacturing

3. Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments?
(a) Standard
(b) Actual
(c) Process
(d) Job order

4. Which of the following statements is false?
(a) In process costing, cost is accumulated according to processes or departments
(b) In job costing, the basis of cost accumulation is job order or batch size
(c) In process costing, cost is accumulated on time basis
(d) In job costing, cost is computed at the end of the cost period

5. Process Cost is based on the concept of
(a) Average Cost
(b) Marginal Cost
(c) Standard Cost
(d) Differential Cost

6. Normal Loss is equal to
(a) Normal Output – Actual Output
(b) Actual Output – Normal Output
(c) Input X % of Normal Loss
(d) None of the above

7. Normal Output is equal to
(a) Input – Abnormal Loss
(b) Input – Normal Loss
(c) Input – Abnormal Gains
(d) None of the above

8. Unit Cost is equal to
(a) Normal Cost ÷ Normal Output
(b) Total Cost ÷ Normal Output
(c) Normal Cost ÷ Total Output
(d) Total Cost ÷ Total Output

9. Abnormal Loss is equal to
(a) Input – Actual Output
(b) Actual Output – Normal Output
(c) Normal Output – Actual Output
(d) Actual Output – Input

10. Abnormal Gains are equal to
(a) Actual Output – Normal Output
(b) Normal Output – Actual Output
(c) Actual Output – Input
(d) Input – Actual Output

Answers: 1)large number of identical products are manufactured 2)Air-craft manufacturing 3)Process 4)In job costing, cost is computed at the end of the cost period 5)Average Cost 6)Input X % of Normal Loss 7)Input – Normal Loss 8)Normal Cost ÷ Normal Output 9)Normal Output – Actual Output 10)Actual Output – Normal Output

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