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

11. Process cost is very much applicable in
(a) Construction Industry
(b) Pharmaceutical Industry
(c) Airline Company
(d) None of these

12. In process costing, each producing department is a
(a) Cost unit
(b) Cost center
(c) Investment center
(d) Sales center

13. Which of the given units can never become part of first department of Cost of Production Report?
(a) Units received from preceding department
(b) Units transferred to subsequent department
(c) Lost units
(d) Units still in process

14. When production is below standard specification or quality and cannot be rectified by incurring additional cost, it is called
(a) Defective
(b) Spoilage
(c) Waste
(d) Scrap

15. What will be the impact of normal loss on the overall per-unit cost?
(a) Per unit cost will increase
(b) Per unit cost will decrease
(c) Per unit cost remain unchanged
(d) Normal loss has no relation to unit cost

16. 12,000 kg of 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?
(a) Abnormal gain of 120 kg
(b) Abnormal loss of 120 kg
(c) Abnormal gain of 1,080 kg
(d) Abnormal loss of 1,080 kg

17. Wastage of raw material during a manufacturing process is 20% of input quantity. What input quantity of raw material is required per kg of output?
(a) 0.8 kg
(b) 1.2 kg
(c) 1.25 kg
(d) 1.33 kg

18. 400 liters 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 liters of material (to the nearest liter) were input into the process in the period?
(a) 500
(b) 520
(c) 560
(d) 571

19. 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 of 150 units
There were no opening or closing stocks.
What was the valuation of one unit of output to one decimal place?
(a) Rs 11.8
(b) Rs 11.6
(c) RS 11.2
(d) Rs 11.0

20. 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?
(a) 2,800 units
(b) 2,900 units
(c) 3,000 units
(d) 3,200 units

Answers: 11)Pharmaceutical Industry 12)Cost center 13)Units received from preceding department 14)Spoilage 15)Per unit cost will increase 16)Abnormal gain of 120 kg 17)1.25 kg 18)571 19)Rs 11.6 20)2,800 units

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