Cost totalling $4250 were incurred in a period.
80 units if output were rejected and destroyed in the period,20 units more than allowed for as a normal loss,leaving 420 units of good production to be transfarred to finished goods..
What is the amount written off as abnormal loss?
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Process costing
6y ago#1If things had gone as expected, normal losses would have been made so 440 units would have resulted (actual plus the 20 abnormal/unexpected loss). Cost of output is always valued as though only normal losses were incurred so, for a cost of 4250 and expected output of 440 the cost per unit is 4250/440 = 9.66 per unit.
These units are either good units or some might be discovered to be abnormally lost. Here 20 must be thrown away at a cost of 9.66 x 20=193.2
Thank you very much sir. Thats the answer i found but was confused as the bpp rev kit was showing the answer to be $170
The rev kit answer was $170 , $4250/500=$8.5
$8.5× 20 units= $170
6y ago#3I think they are wrong. ?
Indeed they are.
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