[sbucker]

Thank you so much for your reply. I’m trying to understand the process account for it:
On the debit side:
Materials $800
Labour $1500
Overheads $1000
Total 3300

On the credit side:
Normal loss 0
Output 150kg *19.59 = $2938.5
Abnormal loss $361.5 (balancing figure)
Total = 3300

The abnormal loss value should be the balancing figure 361.5. Analysing the figure: 30*4.44 + 15*15.15. Am I correctly understanding?

[sbucker]

I’m sorry. Here the process is fully completed since there is no CWIP. Losses should have already been identified. So, why do we need to half the abnormal loss?

[sbucker]

“The approach is the same for labour and overheads, except that the abnormal loss will only have had half of the labour and overhead work. So we spread the total of $2,500 over 165kg (150 + 30/2). ”

It is said that losses are identified when the process is 50% complete. Here the output is already 150kg meaning 150kg/200kg = 75% complete. All losses should have already been identified. Why do we need to half the abnormal loss ?

[Author]

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