Process Costing – Abnormal Gain

Input material 10,000kg at cost of $100,000
Conversion cost $50,000

Normal loss 12% of material input.
Losses are sold at value of $5
Output 9200kg

What is the abnormal gain value that is credited to statement of profit and loss?

Bpp book answer

$100,000 + $500,000 – $6000/ 10,000 x 88% = 16.36

Abnormal gain cost

16.36 – 5 = 11.36

11.36 x 400kg = $4,545

Sir I don’t understand why they less $5 from $16.36.. They had already adjusted the cost per unit with normal loss value..why less $5 again

Please clarify that for me

Thank you.