- This topic has 3 replies, 2 voices, and was last updated 7 years ago by .
Viewing 4 posts - 1 through 4 (of 4 total)
Viewing 4 posts - 1 through 4 (of 4 total)
- You must be logged in to reply to this topic.
Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › process costing
Hi Sir, please help me to answer the question below
a process has a normal loss of 5% of input
all losses have a realisable value of $22 per litre
last month 20000 litres were input into the process and the good output was 19500 litres
process costs for the month were $820,000
what was the entry in the process account for the normal loss last month?
The correct answer was $22,000 (credit) and i don’t understand why.
Have you watched our free lectures on process costing?
The normal loss is 5% x 20,000 = 1,000. The sale value is $22.
So we credit with 1,000 x $22 = $22,000
So why credit and not debit?
Again – have you watched the lectures??
The money from selling losses reduced the net cost of the units that are produced.