A department with no opening work in progress introduced 1000 units into the process ; 600 are completed, 250 are 20% complete, and 150 units are lost, consisting of 100 units of normal loss and 50 units of abnormal Lisa. Losses are detected upon completion. Material costs are £8000 (all introduced at the start of the process) and conversion costs are £4000.
My question now, normal loss value was calculated the same way as normal output. I thought that if no scrap value is given, normal loss has no value.
Values from the book :
Work in progress =2250
Completed units =7800
Abnormal loss =650
Normal loss =1300
Hi – Im not sure what is up with that question – but your understanding is correct. Normal losses do not have a value unless scrap is part of the scenario.
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