Costing - Study Mode
[#926] When output of earlier process is transferred at a profit to the subsequent process, it is ________.
Correct Answer
(C) inter process profit
Explanation
Solution: When output of earlier process is transferred at a profit to the subsequent process, it is inter process profit. The profit associated with the transfer of goods from one process to another process is called inter-process profit.
[#927] 100 units are introduced in a process in which normal loss is 5% of input If actual output is 97 then there is ________.
Correct Answer
(B) 2 units of abnormal gain
Explanation
Solution: 100 units are introduced in a process in which normal loss is 5% of input If actual output is 97 then there is 2 units of abnormal gain.
[#928] 50 units are processed at a cost of Rs 80, normal loss is 10%, each unit carries a scrap value of 25 paise If output is 40 units, the value of abnormal loss will be _________.
Correct Answer
(C) Rs. 8.75
Explanation
Solution: VALUE OF ABNORMAL LOSS = (Total cost - scrap value)/No of unit produced × Abnormal Issue =(80-(5×.25))/(50-5) × 5 =8.75
[#929] Abnormal process loss can be transferred to ________.
Correct Answer
(A) costing profit and loss a/c
Explanation
Solution: Abnormal process loss can be transferred to costing profit and loss a/c. Process account is to be credited by abnormal loss account with cost of material, labour and overhead equivalent to good units and the loss due to abnormal is transferred to Costing Profit and Loss Account.
[#930] When two products are simultaneously produced in a process and one of them has comparatively high value and other is of low value , the low value product is called __________.
Correct Answer
(B) by products
Explanation
Solution: When two products are simultaneously produced in a process and one of them has comparatively high value and other is of low value , the low value product is called by products.