Answered: Input quantity 1,000 kg Normal loss…

Input quantity 1,000 kg Normal loss 10% of input Process costs £14,300 Actual output 880 kg Losses are sold for £8 per kg The cost per unit is equal to A £10 B £15 C £20 D £25

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Input quantity 1,000 kg

Normal loss 10% of input

Process costs £14,300

Actual output 880 kg

Losses are sold for £8 per kg

The cost per unit is equal to

A £10

B £15

C £20

D £25

Definition Definition Operation costing method employed to determine the value of a product at each process or stage of the production process, applicable where goods produced from a series of continuous operations or procedure. Process costing is employed by businesses that manufacture goods and where production is in repetitive inflow.

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