The following information is relating to Process I: Input of raw material : 1,000 units @ ₹20 per unit, Other material : ₹4,200 Direct wages : ₹6,000 Production overheads : ₹6,000 Actual output transferred to Process II
CS Executive · Cost and Management Accounting · PYQS · December 2014
The following information is relating to Process I: Input of raw material : 1,000 units @ ₹20 per unit, Other material : ₹4,200 Direct wages : ₹6,000 Production overheads : ₹6,000 Actual output transferred to Process II : 900 units Normal loss : 5% Scrap sold @ ₹8 per unit. The amount of abnormal loss to be transferred to costing profit and loss account is —
Answer & Explanation:
Correct Answer: Option (B)
Correct answer: (B) ₹1,484. Normal-loss-adjusted unit cost = (36,200−50×8)/950. Abnormal loss is 50 units; after scrap proceeds its net value is approximately 1,484.
Topics: Process Costing
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