Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Process Costing
- This topic has 7 replies, 3 voices, and was last updated 9 years ago by John Moffat.
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- March 26, 2015 at 8:52 pm #239023
Hey,
The following data relates to a process:
Material input 8000 (For 2000 units)
Conversion cost 8480There is a normal loss of 3% of input and all losses sold as scrap at $16 per unit.
The actual loss in this period is 80 units.
What is the total value of the finished goods?15200
15520
16310
15360The answer is 15360, but I do not know did we get the asnwer.
Can you please explain?
Thank you!
March 27, 2015 at 8:21 am #239065You really should watch the free lecture on process costing!
You do the costing on what is expected to happen (which is a loss of 3% of 2,000 = 60 units).
So the cost per unit is (8,000 + 8480 – (60 x 16)) / (2,000 – 60) = $8
The actual finished units are 2000-80 = 1920, and these are valued at $8 per unit.
March 27, 2015 at 10:08 am #239096If question to ask what’s the actual output whether is 2000-60-80=1860x$8=$14,880 ?
thank youMarch 27, 2015 at 10:43 am #239102If the input is 2,000, and if the actual loss is 80, then the actual output is 1,920.
March 28, 2015 at 1:46 pm #239307hi sir, what about the loss of 2000 x 10%=60units?
my working :
dr input 2000 unit $8000
dr.conversion cost $8480
total : 2000 units & $16480cr.output/fg 1860 units $14880
cr.normal loss 60units $960
cr.adnormal loss 80units $640
total : 2000 units & $16480thank you
March 28, 2015 at 4:38 pm #239319The question does not say there is an abnormal loss if 80.
It says that the actual loss is 80 (so the abnormal loss is 20).
My workings earlier are correct.
March 29, 2015 at 3:32 am #239360hi sir, thank you your explain.
March 29, 2015 at 8:10 am #239378You are welcome 🙂
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