ABC Analysis and Process Costing MCQs

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QUESTION TEXT
Which of the following is not a unit level activity
Which of the following systems focuses on activities as the fundamental cost objects and uses the cost of
those activities for compiling the indirect costs of products?
Which of the following is typically regarded as a cost driver in traditional accounting practices?
Cost allocation basis in activity based costing should be
The term cost drivers refers to
In an activity based costing system materials receiving would typically be classified as
The primary benefit of ABC is it provides
In an activity based costing system direct material used would typically be classified as a
Providing the power required to run production equipment is an example of
Which of the following is a product level activity
Which of the following is a typical cost pool
ABC allocates overheads on the basis of

ABC is suitable when there is a ____ range of products
A cost ___ is a term used to indicate grouping of costs incurred on a particular activity which drives them
An activity that has a direct cause - effect relationship with the resources consumed is a
Which of the following does not use process costing ?
In Process costing the final satge is know as
Normal loss is equal to
Abnormal Loss is equal to
Abnormal Gain is equal to
Normal loss is transferred to
Abnormal loss is valued at
Abnormal gain is
Balance of abnormal loss is transferred to
Sale of Scrap is ___
Indirect Labour is
Input is 1200 units, Normal loss 100 units and output is 900 units. So abnormal loss is
Input is 1000 units, Normal loss 100 units output is 850
The loss which cannot be avoided is ___ loss
The loss which cannot be unavoided is ___ loss
Input 1250 Normal loss is 12.5% and weight loss is 5.5% . Output is ______
Productive labour is
Direct Wages is
Sugar Industries is ___ Industries
Process costing is not appplicable in ____Industry
Normal Loss is equal to
Unit Cost is equal to
Process cost is based on the concept of
Which costing method is the concept of equivalent units is relevant
In Process costing , cost follows
OPTION 1 OPTION 2
Purchase ordering assembling
Job costing Activity based costing
Number of purchase order processed Number of customers served
Cost drivers Cost pools
any activity that can be used to predict The attempt to control expenditures at
cost changes a reasonable level
Unit level activity Batch level activity
Better management decisions Enhanced control over overhead costs
Unit level cost Batch level cost

Unit level activity Batch level activity
Equipment setups Product design
Products manufactured A service offered to customers
Volume Activities
Wide Narrow
pool object
Cost driver Overhead rate

Oil refining Distilleries
Finished goods Opening stock
Normal Output - Actual Output Actual Output - Normal Output
Input - Actual Output Actual Output - Normal Output
Actual Output - Normal Output Normal Output - Actual Output
Debited to process A/c Credited to process A/c
Cost of output Market value
Debited to process A/c Credited to process A/c
Costing P&L A/c Financial P&L A/c
Cr in Procees A/c Dr in Process A/c
Factory expenses Factroy income
200 100
Abnormal loss Abnormal gain
Normal Abnormal
Normal Abnormal
1033.5 1050
Direct Wages Indirect Wages
Direct labour Indirect Wages
Manufacturing Service
Steel Oil
Normal out -Actual Output Actual Output-Normal Output
Normal cost /Normal output Total cost/Normal output
Average Cost Marginal Cost
Batch Costing Job Costing
Finsihed goods Product Flow
OPTION 3 OPTION 4 CORRECT OPTION
Painting Sewing 1
Process Costing Product costing 2
Number of transactions processed Number of direct labour hours 4

worked
Activity centers Resources 1
The person who gathers and delivers Any activity that causes costs to be
cost data to the management 4
accountant incurred
Product sustaining activity Facility level activity 2
More cost pools More accurate product costing 4
Product sustaining cost Facility level cost 1

Product level activity Organization sustaining activity 1
Property taxes Utilities 2
A machine used for packaging
Direct labour 4
products
Number Quantity 2
High Short 1
driver allocation 1
Cost pool Product activity 4

Sugar Air-craft manufacturing 4
Carriage inward Carriage outward 4
Input X % of Normal Loss Normal cost / Normal output 3
Normal Output - Actual Output Actual Output - Input 3
Actual Output - Input Input - Actual Output 1
ignored Credited to abnormal account 2
Marginal cost Stardard cost 1
Debit to P&L A/c Credited to P & L A/c 2
No entry Debited to normal loss A/c 1
No entry No realisable value 1
Office expenses Office income 1
900 300 1
No entry Noramal gain 2
Historical Imputed 1
Historical Imputed 2
1080 1023.5 1
Indirect labour Ignore 1
Indirect labour Ignore 1
Finance Trading 1
Biscuit Banking 4
Inut*%of Normal loss Out*%of Normal Loss 3
Normal cost/Total output Total Cost/Total output 1
Standard Cost Differential Cost 1
Process Costing Service Costing 3
Price rise Price decline 2

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SR.

Cost allocation basis in activity based costing should be

The term cost drivers refers to

In an activity based costing system materials receiving would typically be classified as

The primary benefit of ABC is it provides

Which of the following is a typical cost pool

ABC allocates overheads on the basis of

Job costing Activity based costing

Number of purchase order processed Number of customers served

Cost drivers Cost pools

Unit level activity Batch level activity

Better management decisions Enhanced control over overhead costs

Unit level cost Batch level cost

Products manufactured A service offered to customers

Cost driver Overhead rate

Process Costing Product costing 2

Number of transactions processed Number of direct labour hours 4

Product sustaining activity Facility level activity 2

More cost pools More accurate product costing 4

Product sustaining cost Facility level cost 1

Cost pool Product activity 4

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