- This topic has 1 reply, 2 voices, and was last updated 11 months ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
PQ Awards Nominations
Please help us to win one of the PQ Magazine awards and send in the voting form >>
You can nominate us in any or all of the following categories: Online College of the Year, Study Resource of the Year, Private Sector Lecturer of the Year, and Accountancy Personality of the Year.
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 BPP Question
Good Afternoon,
I am struggling on one question in the BPP revision kit.
Q) Ellis Co uses process costing to value its output. The following was recorded for the period:
Input materials 2000 units at $4.50 per unit
Conversion costs 13,340
Normal loss 5% of input at $3 per unit
Actual loss 150 units
There were no opening or closing inventories.
What was the valuation of one unit of output to one decimal place?
The calculations from the book says:
Input = 2000 x 4.50 = 9000
Conversion = 13340
Normal loss = 5% x 2000 x 3 = 300
Expected = 2000 – 100 = 1900
Please can you explain where the 100 units came from at the expected section?
Many thanks,
The input 2,000 units and expect to lose 5%.
5% x 2,000 = 100, so they expect to lose 100 units and expect to produce 1,900 units.