Chapter 15 Self-test questions

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. Which of the following entries appear on the debit side of the process account and which appear on the credit side?

Materials

Credit Debit Debit Debit Credit Debit Credit

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Normal loss

Credit Debit Credit Debit Credit Debit Debit

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Normal loss disposal cost

Credit Credit Debit Debit Credit Debit Debit

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Abnormal loss

Credit Credit Debit Credit Debit Debit Debit

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Conversion cost

Debit Credit Debit Credit Debit Credit Debit

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Abnormal gain

Credit Debit Credit Debit Debit Debit Credit

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Normal loss scrap value

Debit Credit Debit Credit Debit Debit Credit

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. Which of the following are given a monetary value in the process account? Please select all that apply.

Abnormal losses correct incorrect

Abnormal gains correct incorrect

Normal loss disposal costs correct incorrect

Normal losses correct incorrect

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. ADV Limited produces paints. In each production run, the company expects a normal loss of 5% of the materials put into the process. In the latest process, 10,000 litres of material were put into the process at a cost of £50,000. 9,300 litres of paint were produced from this process. Conversion costs were £26,000. What is the total production cost of the 9,300 units of finished production?

£70,680 correct incorrect

£72,200 correct incorrect

£74,400 correct incorrect

£76,000 correct incorrect

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. Material inputs and outputs in a process account are expressed in both __________ terms

Your response

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. Which of the following are descriptions of situations in which process costing can be used? Please select all that apply.

The output from one process becomes the input to the next process. correct incorrect

Continuous production process. correct incorrect

Outputs are in readily divisible units. correct incorrect

Inputs and outputs are in the form of liquids or gases. correct incorrect

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. BJC Limited produces soft drinks. When producing its main product, Keoc, the company expects a normal loss of 5% of the materials put into the process. During the month of June, 5,000 litres of material were used in producing Keoc at a cost of £22,800. 4,800 litres of Keoc were produced during March. Labour and overhead costs for the month totalled up to £18,240. What is the unit cost that will be used in valuing each unit of finished production?

£8.21 correct incorrect

£8.55 correct incorrect

£8.64 correct incorrect

£8.73 correct incorrect

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. Under the weighted average cost method of valuing finished production and closing work in progress, the resources usedin completing opening work in progress and in starting new units of production cannot be identified separately.

True correct incorrect

False correct incorrect

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. BCD Limited operates a process in which there is opening and closing work in progress. At the start of April, opening work in progress was made up of 2,000 units which were 40% complete with respect to materials. 30,000 units of production were completed during April. At the end of the month, there were 1,600 units of work in progress which were 50% complete with respect to materials. What are the equivalent units of material put into the process during April using the first in, first out method of valuing finished production and closing work in progress?

29,600 correct incorrect

30,000 correct incorrect

30,800 correct incorrect

32,000 correct incorrect

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. (Value of opening work in progress + costs incurred in the period) ÷ the number of equivalent units produced in the period is how the first in first out method calculates the cost per equivalent unit of output and closing work in progress.

True correct incorrect

False correct incorrect

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. FFC Limited operates a process in which there is opening and closing work in progress. At the start of June, opening work in progress was made up of 8,000 units which were 45% complete with respect to both material and conversion costs. 38,000 units of production were completed during June. At the end of the month, there were 8,750 units of work in progress which were 64% complete with respect to materials and conversion costs. Opening work in progress was valued at £17,160 while materials costs for the month totalled up to £125,000 and £35,000 of conversion costs were incurred by the process. FFC Limited uses the first in, first out method of valuing finished goods and closing work in progress. What is the value of closing work in progress at the end of June?

£21,221 correct incorrect

£22,400 correct incorrect

£24,802 correct incorrect

£35,000 correct incorrect

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. Which of the following are given a unit value in the process account? Please select all that apply.

Outputs correct incorrect

Labour and overhead correct incorrect

Materials correct incorrect

Normal losses correct incorrect

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. ABC Limited produces washing up liquid. In each production run, the company expects a normal loss of 3% of the materials input to the process. All losses from this process can be sold for £0.20 per litre. In the latest process, 8,000 litres of material were put into the process at a cost of £6,650. 7,700 litres of washing up liquid were produced from this process. Conversion costs were £2,322. What is the balance on the abnormal loss account that will be reported separately to management in the costing statement of profit or loss?

£57 correct incorrect

£69 correct incorrect

£81 correct incorrect

£285 correct incorrect

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. Debit disposals cost account, credit process account is the correct double entry to record the disposal costs of normal losses.

True correct incorrect

False correct incorrect

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. DDC Limited operates a process in which there is opening and closing work in progress. At the start of April, opening work in progress was made up of 10,000 units which were 60% complete with respect to both material and conversion costs. 52,000 units of production were completed during April. At the end of the month, there were 10,000 units of work in progress which were 80% complete with respect to both materials and conversion costs. Opening work in progress was valued at £16,200 with materials costs for the month totalling up to £95,000 and £40,000 of conversion costs being incurred by the process. DDC Limited uses the weighted average cost method of valuing finished goods and closing work in progress. What is the value of completed units of output during April?

£131,040 correct incorrect

£131,200 correct incorrect

£145,000 correct incorrect

£145,600 correct incorrect

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. TTV Limited produces detergents. Normal losses from the detergent making process are 10% of materials input. Normal and abnormal losses from the process incur a disposal cost of £2.16 per litre. During February, 12,000 litres of material were used in the process at a cost of £25 per litre. Labour and overhead costs for the month totalled up to £133,944. What is the unit cost that will be used in valuing each unit of finished production, abnormal gains and abnormal losses?

£36.38 correct incorrect

£39.94 correct incorrect

£40.18 correct incorrect

£40.42 correct incorrect