Following are the top Unit Costing Question Answer (Cost Accounting).

Unit Costing Question Answer (Cost Accounting)

1. Define unit cost?

Answer: Unit cost refers unit of production or service for which costs are ascertained and expressed.

2. What is Unit Costing method?

Answer: It is a method of costing and is adopted where manufacturing determination of cost per unit is required.

3. Give two main assumptions of unit and output costing method?

Answer:

The main assumption of unit costing method are:
Production involves only a single process or operation.
Unit of output is identical.

4. Write down the Names of Methods of Unit costing?

Answer: These are cost sheet, statement of cost, and production account.

5. What is Cost Sheet?

Answer: It is a schedule which provides information regarding the quantity of production total cost of production, the total cost of a product and cost per unit.

6. What is the production account?

Answer: Production account reveals the cost of production in an analytical manner according to the double entry system.

7. State the name of four industries where unit costing is applied?

Answer: Unit costing methods is used in Brick industry, Coal industry, Paper industry, Tea industry, Breweries industry, Cement industry.

8. How scrap or wastage is the treatment of scrap made?

Answer: Scrap is that residual portion of the material which remains at the end of the manufacturing process and cannot be further processed its sale value can be deducted out of the cost of material or overhead.

9. What is the tender price?

Answer: Tender price is an estimated selling price ascertain and informed to the probable buyer prior to procuring production order.

10. What is the cost sheet? How does it differ from a production account?

Answer: It is a schedule which provides information regarding the quantity of production total cost of a product and cost per unit production account reveals the cost of production in a manner according to the double entry system.

11. What is the difference between the production cost of goods sold and the cost of production?

Answer: Cost of production can be ascertained by adding administrative cost in working cost when the opening stock of finished goods is added in production cost of goods sold and closing stock is deducted out of sum then cost of production is ascertained.

12. What Are the Objects of unit costing method?

Answer: The objects of unit costing are:

To ascertain total cost and cost per unit
Analyze expenses for unit cost,
To comparative study.
Find out the proportion of expenses in respect of each element of cost,
To provide the basis for the determination of selling price.
To determine the tender price.

13. What is the Procedure to Prepare production Account?

Answer: Production account is based upon double entry system cost of production and profit or loss can be ascertained and is prepared in two parts.

The First part of the debit side of production account exhibit production cost under different heads.

In Second part opening and closing stock of work- in- progress is adjusted in of debit and credit side of the account opening stock of finished goods are shown in the debit side while closing stock is shown in credit side. Amount of sales is recorded on the credit side and difference in both sides is ascertained.

If the total of the credit side is more than debit side it is profit otherwise it is the loss.

Top 13 Unit Costing Question Answer (Cost Accounting)