F2 (MA/FMA) – Chapter 08 – PART C – CBE MCQs – ACCA

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

These multiple-choice questions (MCQs) are designed to help ACCA F2 (MA) students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

INFORMATION ABOUT THESE MCQs Test

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

Benefits of Practicing Online on AGlobalBox.com

  1. Authentic Exam Experience:
    Practicing online allows ACCA students to experience an environment closely resembling the actual exam. The MCQs on our platform are designed to mirror the format, difficulty level, and question types found in ACCA exams. This familiarity helps students become more comfortable and confident when facing the real exam.
  2. Comprehensive Question Bank:
    We provided comprehensive question banks covering various topics across the syllabus. By practicing online, students gain access to a wide range of MCQs that thoroughly test their knowledge and understanding in each area.
  3. Enhanced Learning and Retention:
    The interactive nature of online practice enhances learning and improves information retention. Students can actively engage with the MCQs, select answers, and receive immediate results. This approach aids in reinforcing concepts and identifying areas that require further study, thereby maximizing learning outcomes.
  4. Time Management Skills:
    Practicing online helps students develop essential time management skills required for ACCA exams. By adhering to time limits while answering MCQs, students learn to allocate their time effectively and improve their speed and accuracy. This skill is invaluable for completing the actual exam within the given time constraints.
  5. Performance Tracking and Progress Evaluation:
    Students can monitor their results, track their strengths and weaknesses, and identify areas that need improvement.

Number of the Questions

There are 17 Questions in this F2 MCQ Test that cover Chapter 8a; Process Costing of ACCA F2 (MA/FMA) Management Accounting Module.

Time

This MCQs test is not time-bound. Take your time and solve them without stress. Pay proper attention and focus. Do not rush or hesitate.

Result

Students will get their F2 CBE MCQ result after they finish the entire test. They will also be able to see the score in percentage, correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all answers that seem correct or incorrect, as per the requirement of the question. Keep your eye on the wording “(select all those which are correct/ or incorrect)”.
Dropdown: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.


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F2 - Chapter 8 - Part A - MCQs

Course: ACCA - FIA
Subject:
F2 (MA/FMA) Management Accounting
Chapter: 8 - Process costing, and 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

INSTRUCTIONS

  1. If you are using mobile, turn on the mobile rotation and solve the MCQs on wide screen for better experience.

REQUEST

  1. Please rate the quiz and give us feedback once you completed the quiz.
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1 / 28

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?

2 / 28

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?

3 / 28

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?

4 / 28

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

5 / 28

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?

6 / 28

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?

7 / 28

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 $)?

8 / 28

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?

9 / 28

Which of the following statements about process losses are correct?

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

10 / 28

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 / 28

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?

12 / 28

In a process account, how are abnormal losses valued?

13 / 28

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

14 / 28

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?

15 / 28

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?

16 / 28

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?

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

17 / 28

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

18 / 28

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 $)?

19 / 28

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.

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

20 / 28

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?

21 / 28

Which of the following statements is/are correct?

  1. 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
  2. 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
  3. Costs incurred prior to the point of separation are known as common or joint costs

22 / 28

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?

23 / 28

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?

24 / 28

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?

25 / 28

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?

26 / 28

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 value of the closing work in progress on 30 November?

27 / 28

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?

28 / 28

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?

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