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CMA Inter Process Costing — practice questions

Explore 9 free Process Costing questions in CMA Inter Cost and Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Process Costing questions and exercises with answers

Showing questions 1–9 of 9.

Normal loss or abnormal loss?Read the answer and worked solution →Match the process costing termRead the answer and worked solution →Quick: read the process accountRead the answer and worked solution →A process loss that is inherent in the nature of the work and can be anticipated is calledRead the answer and worked solution →Loss in excess of the predetermined normal loss is treated asRead the answer and worked solution →Input is 5,000 units and normal loss is anticipated at 5 per cent. Normal loss units areRead the answer and worked solution →When normal loss has no realisable value, cost per unit is total cost divided byRead the answer and worked solution →The value of normal loss is measured asRead the answer and worked solution →Converting incomplete units into their equivalent completed units givesRead the answer and worked solution →

Worked practice questions

Normal loss or abnormal loss?

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Left
Normal
Items
  1. Item
    Inherent in work
    Answer
    Normal
  2. Item
    Can be anticipated
    Answer
    Normal
  3. Item
    Unavoidable
    Answer
    Normal
  4. Item
    Units drawn to test
    Answer
    Normal
  5. Item
    Worker carelessness
    Answer
    Abnormal
  6. Item
    Bad plant design
    Answer
    Abnormal
  7. Item
    Sabotage
    Answer
    Abnormal
  8. Item
    Above expected loss
    Answer
    Abnormal
Right
Abnormal
Instructions
Swipe left if the loss is normal, right if it is abnormal.
_Source: ICAI CA Inter Cost and Management Accounting, Ch10 'Process and Operation Costing', 10.3_

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Match the process costing term

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Matching pairs
  1. Left
    Normal loss
    Right
    Loss inherent in the process itself
  2. Left
    Abnormal loss
    Right
    Loss beyond the anticipated level
  3. Left
    Equivalent units
    Right
    Incomplete units restated as complete
  4. Left
    Inter-process profit
    Right
    Margin added on transfer to next process
Instructions
Tap a term on the left, then the meaning that fits it.
_Source: ICAI CA Inter Cost and Management Accounting, Ch10, 10.3 and 10.4.1_

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Quick: read the process account

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Questions
  1. Question
    Input is 5,000 units and normal loss is 5 per cent. Normal loss units are
    Choices
    1. 500
    2. 250
    3. 50
    Correct choice
    250
  2. Question
    With no scrap value, the value credited to normal loss is
    Choices
    1. Cost per unit
    2. Scrap value
    3. Nil
    Correct choice
    Nil
  3. Question
    Cost per unit divides total cost by
    Choices
    1. Input units less normal loss
    2. Total input units
    3. Output units sold
    Correct choice
    Input units less normal loss
  4. Question
    Loss caused by a worker's carelessness is treated as
    Choices
    1. Normal loss
    2. Abnormal loss
    3. Inter-process profit
    Correct choice
    Abnormal loss
Instructions
Tap the correct answer for each line of the worked example.
_Source: ICAI CA Inter Cost and Management Accounting, Ch10, Example 1 (normal loss, no realisable value)_

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More Cost and Management Accounting topics

Cost SheetMarginal CostingStandard CostingBudgets and Budgetary Control