In process costing, what is considered a "normal loss"?

Process Costing

Quiz
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Other
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University
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Hard
Anandhiprabha A
Used 1+ times
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10 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
A) Losses that occur due to inefficiency or errors in the production process.
B) Losses that are expected in the course of production and are included in the cost calculation.
C) Losses that result from accidents or unexpected events.
D) Losses that are above the expected levels and require further investigation.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is an "abnormal loss" in a process costing system?
A) Losses that are within the expected or normal range.
B) Losses that occur due to inefficiencies, errors, or accidents beyond the normal expectation.
C) Losses that can be traced directly to specific departments.
D) Losses that are assumed to be permanent and do not need to be accounted for.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How is the cost of abnormal loss treated in process costing?
A) It is spread over the cost of all units produced.
B) It is charged to the profit and loss account immediately.
C) It is included in the cost of normal units produced.
D) It is added to the cost of the finished goods inventory.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is true about abnormal gain in process costing?
A) It is a gain resulting from unexpected higher-than-expected production.
B) It is a gain resulting from better-than-expected efficiency in the production process.
C) It is not recorded in the process costing system.
D) It is treated the same way as normal loss in process costing.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How is abnormal gain treated in process costing?
A) It is deducted from the cost of production for the period.
B) It is included in the cost of goods manufactured.
C) It is credited to the profit and loss account.
D) It is recorded in a separate abnormal gain account and adjusted accordingly.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In a process costing system, if the production output exceeds expectations, it may result in:
A) Normal loss.
B) Abnormal gain.
C) Abnormal loss.
D) Normal gain.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In process costing, if the actual loss is higher than the expected loss, the excess loss is treated as:
A) Abnormal gain.
B) Abnormal loss.
C) Normal loss.
D) Irrecoverable loss.
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