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Hello,
Can someone solve for me this question :-
From the following information, prepare:
a)the process account
b)the abnormal loss or gain account.Process:Input 6,000 units
Normal loss:5% of input
Direct materials:$21,600
Direct labour:8,000
Production overhead:$16,000
Actual output:5,500 units
Loss has scrap value per unit of $3.80.You help would be appreciated.
Thanks in advance 🙂Now, i am in a good mood to explain….
to create process account.
you need to identify which entries are debited and credited…input costs, labour cost, production overhead costs are debited in process acc.
output cost, normal loss are credited…
abnormal gain is debited and abnormal loss is credited…
to find the cost of ouptut, you need to do some calculations…..
before making abnormal loss or gain account.. you need to make scrap account. so, after making process acc, make scrap account and then abnormal loss / gain account.
if you still have doubts on any steps , pls ask again…
Umm, thanks for your reply. But i needed someone to actually solve it, i already do know how to do it. But my answer and the book’s answer are different.
So i was hoping to get a third opinion. 🙂@vipin70 said:
Now, i am in a good mood to explain….to create process account.
you need to identify which entries are debited and credited…input costs, labour cost, production overhead costs are debited in process acc.
output cost, normal loss are credited…
abnormal gain is debited and abnormal loss is credited…
to find the cost of ouptut, you need to do some calculations…..
before making abnormal loss or gain account.. you need to make scrap account. so, after making process acc, make scrap account and then abnormal loss / gain account.
if you still have doubts on any steps , pls ask again…
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