Process Costing Quiz

A process costing system is most appropriate when __________.

• a variety of different products are produced, each one requiring different types of materials, labor, and overhead.

• similar products are mass-produced.

• individual products are custom made to the specification of customers.

Which of the following are components of conversion costs?

• Direct labour and direct materials

• Indirect materials and manufacturing overhead

• Direct labour and manufacturing overhead

Product costs comprise:

• direct materials, direct labour and manufacturing overhead.

• direct labour and manufacturing overhead.

• direct materials and direct labour.

Which of the following is NOT the features of process costing?

• Certain products may be incidentally produced from the production process.

• The output of one process will become the input of the next process.

• There is no uniformity in the flow of production.

Process costing would be an appropriate product costing in the following industries;

i. Petroleum

ii. Food processing

iii. Timber processing

iv. Electronics

• i,ii,iii

• ii,iii,iv

• All of the above

When products are completed, their product costs are transferred from work in process inventory to the:

• manufacturing overhead accounts.

• finished goods account.

• cost of goods sold account.

_________________ is the cost that has been determined by the management based on previous experiences and was expected in advance.

• Abnormal loss

• Actual output

• Normal loss

An abnormal gain in a process occurs in which of the following situations?

• When actual losses are greater than the normal loss level.

• When actual losses are less than the normal loss level.

• When the actual process output is less than planned output.

____________________ is the notional whole units representing incomplete work.

• Equivalent product

• Equivalent unit

• Completed unit

Classify how are abnormal losses valued in a process account?

• The same as good production

• At the raw material costs

• The same thing as normal losses