CIMA BA2 · Chapter 5 · Question 9 of 10
Which of the following features distinguishes PROCESS costing from job costing?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Costs are averaged over large numbers of identical units produced in a continuous flow
Explanation
Process costing applies where output consists of a continuous flow of homogeneous units, so costs are accumulated by process and averaged over the units produced. Separately identifiable customer orders are a feature of job costing.
More Job, batch and process costing MCQs
- Q1For which of the following businesses would JOB costing be most appropriate?
- Q2A job requires direct materials of $2,300 and 40 direct labour hours paid at $18 per hour. Production overheads are absorbed at $25 per…
- Q3A batch of 500 identical souvenir mugs incurred the following costs: materials $3,400, direct labour $1,250, machine set-up $350 and…
- Q4A process was charged with 10,000 kg of material costing $46,000 and conversion costs of $18,000. Normal loss is 8% of input and can be…
- Q5Input to a process was 5,000 litres at a total cost of $27,000. Normal loss is 10% of input and is sold as scrap for $1.50 per litre…