These are ACCA F2 (MA/FMA) Management Accounting MCQs for Part-C of the Syllabus “Cost accounting methods and systems”.

These MCQs are designed in a way that students could better understand the exam format and get used to practice online. This approach will reduce exam stress and enable students to prepare better.

We request the students, Not to solve the MCQs until they have learned and finished the entire F2 (MA/FMA) Management Accounting Chapter 8a – Process costing and Syllabus Area Part-C “Cost accounting methods and systems”.

All the questions are compulsory, so do not skip any.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course: ACCA – Associations of Chartered Certified Accountants
Fundamental Level: Knowledge, FIA – Foundation in Accounting
Subject: Management Accounting
Paper: F2 – MA/FMA
Chapter: Process costing
Chapter Number: 8a of the Practice and Exam Kit
Syllabus Area: C – Cost accounting methods and systems
Questions Type: CBE MCQs
Exam Section Type: Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part C of the Syllabus; Cost accounting methods and systems of ACCA F2 (MA/FMA) Management Accounting Module.

Time

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F2 - Chapter 8a - Part A - MCQs

Course: ACCA - FIA
Subject: F2 (MA/FMA) Management Accounting
Chapter: 8a - Process costing
Syllabus Area: C - Cost accounting methods and systems
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

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1 / 17

A company uses process costing to establish the cost per unit of its output.

The following information was available for the last month:

Input units	10,000
Output units	9,850
Opening inventory	300 units, 100% complete for materials and
	70% complete for conversion costs
Closing inventory	450 units, 100% complete for materials and
	30% complete for conversion costs

The company uses the weighted average method of valuing inventory.

What were the equivalent units for conversion costs?

9,985 units

9,715 units

9,505 units

9,775 units

2 / 17

A company needs to produce 340 litres of Chemical X. There is a normal loss of 10% of the material input into the process. During a given month the company did produce 340 litres of good production, although there was an abnormal loss of 5% of the material input into the process.

How many litres of material were input into the process during the month?

______ litres

3 / 17

A company uses process costing to value its output. The following was recorded for the period:

Input materials	2,000 units at $4.50 per unit
Conversion costs	13,340
Normal loss	5% of input valued at $3 per unit
Actual loss	150 units

There were no opening or closing inventories.

What was the valuation of one unit of output to one decimal place?

$11.6

$11.8

$11.2

$11.0

4 / 17

The following information relates to a company's polishing process for the previous period.

Output to finished goods	5,408 units valued at $29,744
Normal loss	276 units
Actual loss	112 units

All losses have a scrap value of $2.50 per unit and there was no opening or closing work in progress.

What was the value of the input during the period?

$30,434

$29,744

$29,532

$28,842

5 / 17

In a process account, how are abnormal losses valued?

The same as good production

The same as normal losses

At their scrap value

At the cost of raw materials

6 / 17

A company makes a product in two processes. The following data is available for the latest period, for process 1.

Opening work in progress of 200 units was valued as follows.

Material	$2,400
Labour	$1,200
Overhead	$400

No losses occur in the process.

Units added and costs incurred during the period:

Material	$6,000 (500 units)
Labour	$3,350
Overhead	$1,490

Closing work in progress of 100 units had reached the following degrees of completion:

Material	100%
Labour	50%
Overhead	30%

The company uses the weighted average method of inventory valuation.

What is the value of the units transferred to process 2?

$14,840

$13,200

$15,400

$7,200

7 / 17

A company produces a certain food item in a manufacturing process. On 1 November, there was no opening inventory of work in process. During November, 500 units of material were input to the process, with a cost of $9,000. Direct labour costs in November were $3,840. Production overhead is absorbed at the rate of 200% of direct labour costs. Closing inventory on 30 November consisted of 100 units which were 100% complete as to materials and 80% complete as to labour and overhead. There was no loss in process.

What is the full production cost of completed units during November?

$10,400

$16,416

$20,520

$16,800

8 / 17

A company operates a continuous process into which 3,000 units of material costing $9,000 was input in a period. Conversion costs for this period were $11,970 and losses, which have a scrap value of $1.50, are expected at a rate of 10% of input. There were no opening or closing inventories and output for the period was 2,900 units.

What was the output valuation?

$20,271

$20,520

$20,970

$22,040

9 / 17

A company makes a product in two processes. The following data is available for the latest period, for process 1.

Opening work in progress of 200 units was valued as follows.

Material	$2,400
Labour	$1,200
Overhead	$400

No losses occur in the process.

Units added and costs incurred during the period:

Material	$6,000 (500 units)
Labour	$3,350
Overhead	$1,490

Closing work in progress of 100 units had reached the following degrees of completion:

Material	100%
Labour	50%
Overhead	30%

The company uses the weighted average method of inventory valuation.

How many equivalent units are used when calculating the cost per unit in relation to overhead?

500

600

630

700

10 / 17

What is the value of the closing work in progress on 30 November?

$3,720

$4,104

$2,440

$20,520

11 / 17

A company manufactures Chemical X, in a single process. At the start of the month there was no work-in- progress. During the month 300 litres of raw material were input into the process at a total cost of $6,000. Conversion costs during the month amounted to $4,500. At the end of the month 250 litres of Chemical X were transferred to finished goods inventory. The remaining work-in-progress was 100% complete with respect to materials and 50% complete with respect to conversion costs. There were no losses in the process and there is no scrap value available during months when losses occur.

What are the equivalent units for closing work-in-progress at the end of the month?

Material 25 litres, Conversion costs 50 litres

Material 50 litres, Conversion costs 25 litres

Material 50 litres, Conversion costs 50 litres

Material 25 litres, Conversion costs 25 litres

12 / 17

If there had been a normal process loss of 10% of input during the month what would the value of this loss have been?

$1,050

Nil

$600

$450

13 / 17

A chemical process has a normal wastage of 10% of input. In a period, 2,500 kg of material were input and there was an abnormal loss of 75 kg.

What quantity of good production was achieved?

______ kg

14 / 17

The following question is taken from the September to June 2018 exam period.

A process is subject to a normal loss of 12% of input. Losses can be sold for $5 per kg. In the last period 10,000 kg of material costing $100,000 was input to the process. Conversion costs for the period were $50,000 and output was 9,200 kg.

What is the credit to the statement of profit or loss from the abnormal gain account in the last period?

$6,818

$4,545

$4,818

$4,260

15 / 17

Which of the following statements about process losses are correct?

Units of normal loss should be valued at full cost per unit
Units of abnormal loss should be valued at their scrap value

Both of them

Neither of them

(i) only

(ii) only

16 / 17

The following question is taken from the January to June 2015 exam period.

Normally no losses are expected from a process. Any abnormal losses are sold for scrap.

Which of the following calculates the net cost to the company of one unit of abnormal loss?

(Total input cost ÷ expected output units) – scrap value per unit

(Total input cost – total scrap value) ÷ expected output units

Total input cost ÷ expected output units

Total input cost ÷ actual output units

17 / 17

In a particular process, the input for the period was 2,000 units. There were no inventories at the beginning or end of the process. Normal loss is 5% of input.

In which of the following circumstances is there an abnormal gain?

Actual output = 1,800 units
Actual output = 1,950 units
Actual output = 2,000 units

(i) and (ii) only

(ii) only

(ii) and (iii) only

(i) only

Your score is

F2 (MA/FMA) – Chapter 8a – PART C – CBE MCQs – ACCA