Process Costing

Question 1

What is the layout for the abnormal loss account?

Answer 1

Abnormal loss
P1 (ab loss from process accounts) NL P1 (units the same) and (x scrap value)

bf- balance figure

Question 2

What is the layout for abnormal gain account?

Answer 2

Abnormal gain
NL P2 (units the same) (x scrap value)   P2  (ab gain from process account)

bf- balance figure

Question 3

What is the layout of the normal loss account?

Answer 3

Normal loss
P1 (NL from process AG P2 (NL from ab gain account)
P2 accounts) Cash or (Difference)
AL P1 (NL from ab loss account) receivables

Question 4

CPU=

Answer 4

Total cost of production- scrap value

/

Expected output in units of material

Question 5

Normal loss=

Abnormal gain=

Abnormal loss=

Answer 5

• expected loss
• means we have got more output from the process than we expected
• means we have got less output from the process than we expected

Question 6

Number of EUs=

Answer 6

Number of completed units + (number of WIP units x % complete)

Question 7

What is the layout for the process costing accounts?

Answer 7

Process 1
DM NL (% x scrap value)
DL Output (x CPU)
OH Ab loss (x CPU)

Process 2
P1 output          NL   (% x scrap value)
DM                     Output (x CPU)
DL                     
OH
Ab gain

Question 8

CPU=

Answer 8

(DM+DL+OH) - £ NL / total material - NL units