1. Cost of production report is a ______________
a)
b)
c)
d)
Financial statement
Production Process report
Order Sheet
None of above
2. Which of the following statement measures the financial position of the entity on
particular time?
e)
f)
g)
h)
Income Statement
Balance Sheet
Cash Flow Statement
Statement of Retained Earning
3. Which of the following is a characteristic of process cost accounting system?
a)
b)
c)
d)
Material, Labor and Overheads are accumulated by orders
Companies use this system if they process custom orders
Opening and Closing stock of work in process are related in terms of completed units
Only Closing stock of work in process is restated in terms of completed units
4. The difference between total revenues and total variable costs is known as
______________
a)
b)
c)
d)
Contribution margin
Gross margin
Operating income
Fixed costs
5. Opening work in process inventory can be calculated as under
a)
b)
c)
d)
FIFO and Average costing
LIFO and Average costing
FIFO and LIFO costing
None of given option.
6. Fixed cost per unit decreases when ______________
a)
b)
c)
d)
Production volume increases.
Production volume decreases.
Variable cost per unit decreases.
Variable cost per unit increases.
7. Prime cost + Factory overhead cost is ______________
a) Conversion cost.
b) Production cost.
c) Total cost.
d) None of given option.
8. Standard costing entails the creation of predetermined cost estimates to serve as
a baseline against which
a) actual costs can be compared
b) real costs can be compared
c) future costs can be compared
d) past costs can be compared
9. Why do companies use the Standard costing concept?
a) Because actual costs cannot be established, companies budget using standard
costs
b) The demand for the product is not an important factor of assumption
c) Overhead expenses are already calculated by the companies
d) Standard costing concept is a conventional costing method