- This topic has 4 replies, 3 voices, and was last updated 9 years ago by
.
- Posts
Dear Sir,
can you please help me with the example below? You actually resolved it once but I still do not get it… sorry for the inconvenience.
Izabela
The question says “ABC manufactures a single product. Normal loss (scrap) in the process is 10% of output and scrapped units can be sold off for 4$/unit.
Process costs of direct materials, labour, production overheads totalled 184 800 $.
Input to the process in the month was 13 200 unitsWhat was the cost/unit produced?
Reply
If the loss is 10% of output, then for every 100 units output the loss will have been 10 units and therefore the input will have been 110 units.
So……if the input was 13,200 unit then the output must have been 100/100 x 12000 units.
(and the loss is 10% x 12,000 units = 1200 units, which checks OK. 13,200 input – 12000 input does equal a loss of 1200 which is 10% of the output of 12000!)
Could be helpful how am I I am figuring it out ?
given loss 10%
we get
input 100 + 10% loss = 110
loss 10%
and thus get output share at 100% (110 -10)if we divide input by 110 and we get one unit of input (120) then we only need to multiply it by 100 (output): 120* 100 = 12000 and we get output. Then I can calculate my normal loss by following the exercise note (10% of output)
I really don’t know why you want to do it a different way.
However, provided you get the correct answer then that is all the matters.
(Questions like this will only appear as MCQ’s and for MCQ’s the computer only marks the answer you choose – nobody looks at your workings.)
- The topic ‘Process Costing’ is closed to new replies.