This quiz, process costing multiple choice questions (MCQs), tests a student’s knowledge of the fundamentals. Completing it will be helpful to prepare for exams and interviews.
The quiz contains 9 MCQs with 4 possible options for each MCQ. Students need to select the correct option to proceed to the next question.
You can complete the MCQs test for process costing below. If you find any questions difficult, you can learn more about process costing from the section on cost accounting.
Process Costing MCQs FAQs
Process Costing is used when output is produced in a continuous process system, and it is difficult to separate individual units of output.
Transferred-in costs are the costs accumulated by the product at any given point in production. They are "transferred in" to the new business department that receives the partially finished product and is responsible for continuing the production process.
Following are the fundamental principles of Process Costing: 1. Cost of materials, wages, and overhead expenses are collected for each process or operation in a period. 2. Adequate records regarding output and scrap of each process or operation during the period are kept.
There are three kinds of Process Costing: weighted average, standard, and First-in First-out (FIFO). There is no Last-in, Last-out (LIFO) method of Process Costing, as the basic principle of Process Costing is that the first unit produced is the first unit used.
One example of Process Costing is the manufacture of automobiles. In this type of process, each step in the production process is tracked and assigned a specific cost. This helps to ensure that the final product is accurately priced.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.