Process Costing MCQs (1-10)

1. Which of the following System applies when standardized goods are produced under a series of inter-connected operations?

(a) Job Order Costing

(b) Process Costing

(c) Standard Costing

(d) All of the given options

Correct! Wrong!

2. Factory overhead should be allocated on the basis of?

(a) Direct labor hours

(b) Direct labor costs

(c) An activity basis which relates to cost incurrence

(d) Machine hours

Correct! Wrong!

3. The cost of material that is not completely processed, would be found in which of the following inventory account on the Balance Sheet?

(a) Direct material inventory

(b) Work-in-process inventory

(c) Finished goods inventory

(d) Supplies inventory

Correct! Wrong!

4. In a process costing system, the journal entry to record the transfer of goods from Department #2 to Finished Goods Inventory is a?

(a) Debit Work in Process Inventory #2, credit Finished Goods Inventory

(b) Debit Finished Goods Inventory, credit Work in Process Inventory #1

(c) Debit Finished Goods Inventory, credit Work in Process Inventory #2

(d) Debit Cost of Goods Sold, credit Work in Process Inventory #2

Correct! Wrong!

5. The statement prepared under process costing is called?

(a) Cost of goods sold statement

(b) Income statement

(c) Cost of production report

(d) Variance statement

Correct! Wrong!

6. The first step in preparing the production cost report is to?

(a) Account for the number of physical units

(b) calculate the cost per equivalent unit

(c) Assign costs to the items completed and items in ending Work in Process inventory

(d) Account for the amount of product cost

Correct! Wrong!

7. A Company had no beginning work in process. During the period, 5,000 units were completed, and there were 500 units of ending work in process. How many units were started in production?

(a) 5,500

(b) 5,000

(c) 4,500

(d) 500

Correct! Wrong!

8. Which cost accumulation procedure is best suited to a continuous mass production process of similar units?

(a) Job order costing

(b) Standard costing

(c) Actual costing

(d) Process costing

Correct! Wrong!

9. Which of the following accounts is similar to the Inventory account of a merchandising company?

(a) Raw Materials Inventory

(b) Work in Process Inventory

(c) Finished Goods Inventory

(d) Manufacturing Overhead

Correct! Wrong!

10. Finished Goods Inventory decreases by the?

(a) Cost of goods manufactured

(b) Overhead applied

(c) Cost of selling the product

(d) Cost of goods sold

Correct! Wrong!

1. Which of the following System applies when standardized goods are produced under a series of inter-connected operations?

2. Factory overhead should be allocated on the basis of?

3. The cost of material that is not completely processed, would be found in which of the following inventory account on the Balance Sheet?

4. In a process costing system, the journal entry to record the transfer of goods from Department #2 to Finished Goods Inventory is a?

5. The statement prepared under process costing is called?

6. The first step in preparing the production cost report is to?

7. A Company had no beginning work in process. During the period, 5,000 units were completed, and there were 500 units of ending work in process. How many units were started in production?

8. Which cost accumulation procedure is best suited to a continuous mass production process of similar units?

9. Which of the following accounts is similar to the Inventory account of a merchandising company?

10. Finished Goods Inventory decreases by the?

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