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Question - The input to a purifying process is:
Direct Materials 80,000 kilos @ $8 per kilo
Direct Labour 10,000 hours @ $7 per hour
Overheads $140,000
Normal loss is 5% of input with any, scrap sold for $1.50 per kilo. Actual output is 62,000 kilos with closing work in progress at the end of the period being 6,000 kilos - fully complete for materials but only 60% complete for conversion costs.
Required -
a) Complete the Process Account.
b) Complete any Abnormal Loss or Gain Account.
c) Complete the Scrap Account.
d) Explain the difference between a Joint and a By-product.
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