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 8b – Process costing, joint products and by-products 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, joint products and by-products
Chapter Number: 8b 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 8b - Part A - MCQs

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

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1 / 11

A process produces two joint products A and B in equal physical quantities. A and B are sold at split off point for $5 per kg and $8 per kg respectively. There are no further costs after the split off point.

If joint costs are apportioned on a relative sales value basis, which of the following statements is true?

Both products will have the same return on sales ratio (operating margin)

Product A will have the higher return on sales ratio (operating margin)

The cost per kg of product A will be higher than that of product B

The cost per kg will be the same for both products

2 / 11

Which of the following is NOT an acceptable method of accounting for by-products?

Pre-separation costs are apportioned to the by-product to calculate its profit

Sales value of the by-product is deducted from the cost of the main product

By-product income less post-separation costs is added to the sales of the main product

Net realisable value of the by-product is deducted from the cost of the main product

3 / 11

Which of the following statements is/are correct?

A by-product is a product produced at the same time as other products which has a relatively low volume compared with the other products
Since a by-product is a saleable item it should be separately costed in the process account, and should absorb some of the process costs
Costs incurred prior to the point of separation are known as common or joint costs

(ii) and (iii)

(i) and (iii)

(i) and (ii)

(iii) only

4 / 11

A company manufactures two joint products and one by-product in a single process. Data for November are as follows.

	$
Raw material input	216,000
Conversion costs	72,000

There were no inventories at the beginning or end of the period.

	Output Units	Sales price $ per unit
Joint product E	21,000	15
Joint product Q	18,000	10
By-product X	2,000	2

By-product sales revenue is credited to the process account. Joint costs are apportioned on a sales value basis.

What were the full production costs of product Q in November (to the nearest $)?

$180,727

$103,273

$102,445

$104,727

5 / 11

A company manufactures three joint products and one by-product from a single process.

Data for May are as follows.

Opening and closing inventories	Nil
Raw material input	$180,000
Conversion costs	$50,000

Output

		Units	Sales price $ per unit
Joint product	L	3,000	32
	M	2,000	42
	N	4,000	38
By-product R		1,000	2

By-product sales revenue is credited to the sales account. Joint costs are apportioned on a sales value basis.

What were the full production costs of product M in May (to the nearest $)?

$57,844

$58,193

$66,506

$57,687

6 / 11

A company manufactures two joint products, P and R, in a common process. Data for June are as follows.

	$
Opening inventory	1,000
Direct materials added	10,000
Conversion costs	12,000
Closing inventory	3,000

	Production Unites	Sales Units	Sales Price $ per unit
P	4,000	5,000	5
R	6,000	5,000	10

If costs are apportioned between joint products on a sales value basis, what was the cost per unit of product R in June?

$2.22

$2.75

$1.25

$2.50

7 / 11

Two products G and H are created from a joint process. G can be sold immediately after split-off. H requires further processing before it is in a saleable condition. There are no opening inventories and no work in progress. The following data are available for last period:

	$
Total joint production costs	384,000
Further processing costs (product H)	159,600

Product	Selling price per unit	Sales Units	Production Units
G	$0.84	400,000	412,000
H	$1.82	200,000	228,000

Using the physical unit method for apportioning joint production costs, what was the cost value of the closing inventory of product H for last period?

$40,264

$45,181

$36,400

$37,520

8 / 11

Two products (W and X) are created from a joint process. Both products can be sold immediately after split-off. There are no opening inventories or work in progress. The following information is available for last period:

Total joint production costs	$776,160
Product	Production units	Sales units	Selling price per unit
W	12,000	10,000	$10
X	10,000	8,000	$12

Using the sales value method of apportioning joint production costs, what was the value of the closing inventory of product X for last period?

$155,232

$310,464

$77,616

$388,080

9 / 11

A company manufactures two joint products, P and R, in a common process. Data for June are as follows.

	$
Opening inventory	1,000
Direct materials added	10,000
Conversion costs	12,000
Closing inventory	3,000

	Production Unites	Sales Units	Sales Price $ per unit
P	4,000	5,000	5
R	6,000	5,000	10

If costs are apportioned between joint products on a physical unit basis, what was the total cost of product P production in June?

$8,000

$8,800

$10,000

$12,000

10 / 11

In a period, a process produced 2,000 kg of a main product and 400 kg of a by-product. The cost of production was $5,000. 1,800 kg of the main product were sold at $10 per kg and all of the by- product produced was sold for $1per kg. There was no opening inventory.

If the sales income of the by-product is deducted from the cost of production, what is the profit for the period?

$13,900

$13,860

$13,400

$15,860

11 / 11

Two joint products A and B are produced in a process. Data for the process for the last period are as follows:

Product	A	B
	Tonnes	Tonnes
Sales	480	320
Production	600	400

Common production costs in the period were $12,000. There was no opening inventory. Both products had a gross profit margin of 40%. Common production costs were apportioned on a physical basis.

What was the gross profit for product A in the period?

$3,840

$2,880

$4,800

$2,304

Your score is

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