Costing - Study Mode

[#176] Value of sales considers sales value at split off method is of
Correct Answer

(B) entire production of accounting period

Explanation

Solution: Value of sales considers sales value at split off method is of entire production of accounting period. The split-off point is the point at which joint production stops and processing for separate products begins. The relative-sales-value method allocates costs based on the relative sales value of each resulting from a joint-production process.

[#177] Partial or completed units of manufactured goods, that do not meet customer specifications and get sold at reduced price or simply discarded, are called
Correct Answer

(A) spoilage

Explanation

Solution: Partial or completed units of manufactured goods, that do not meet customer specifications and get sold at reduced price or simply discarded, are called spoilage. Spoilage is waste or scrap that occurs during the manufacturing process.

[#178] In process and job costing system, normal spoilage cost is considered as
Correct Answer

(C) inventoriable costs

Explanation

Solution: In process and job costing system, normal spoilage cost is considered as inventoriable costs. Inventoriable costs are included in the cost of a product

[#179] Types of spoilage include
Correct Answer

(D) both a and b

Explanation

Solution: Types of spoilage include normal spoilage and abnormal spoilage. Normal spoilage is the kind of spoilage that happens during the production process that business owners can say is normal and acceptable. Abnormal spoilage, on the other hand, is spoilage that is beyond the normal point wherein the level is unexpectedly high. It may be due to defective machinery, sub-standard quality of materials, and even incompetent operators.

[#180] Describe the method of costing to be applied in case of Nursing Home:
Correct Answer

(A) Operating Costing

Explanation

Solution: Operating Costing to be applied in case of Nursing Home. Operating costing is an extension and refined form of process costing. It is also more or less very similar to single or output costing.