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items into normal loss or abnormal loss.

items into normal loss or abnormal loss.

FINANCIAL ACCOUNTING
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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d. Classify the following items into normal loss or abnormal loss. Evaporation of material during process Loss due to inefficient working of new employees Unexpected defect of material Unavoidable loss of material i. i. ii. iv.
Transcribed Image Text:d. Classify the following items into normal loss or abnormal loss. Evaporation of material during process Loss due to inefficient working of new employees Unexpected defect of material Unavoidable loss of material i. i. ii. iv.
EZ Cooking Sdn Bhd is a manufacturing company that produces a special paste known as "Instant Magic Paste". The product is marketed throughout the country and the demand for the product keeps increasing. The production of the product passes through two processes known as Mixing and Finishing. The following information relates to the production of "Instant Magic Paste" for the month of May 2019. Mixing Process Material Direct labour Production overheads 6,500 kg at a total cost of RM41,500 RM15,400 RM4,590 6% of total input, with a scrap value of RM1.00 per kg. 6,120 kgs Normal loss Actual output Finishing Process Material Labour Overhead 680 kg at a total cost of RM19,800 RM16,250 RM6,260 200 kgs at a total cost of RM2,800 1,000 kgs Opening Work in Progress Closing Work in Progress Degree of completion for both opening and closing work in progress are as follows: Opening Work in Progress Closing Work in Progress 100% From previous process Material Labour Overheads 100% 100% 50% 70% 80% 60% 40% Normal loss for Finishing Process is expected to be 4% of total input and they can be sold at RM2.00 per kg. Actual losses recorded were 300 kgs. Required:
Transcribed Image Text:EZ Cooking Sdn Bhd is a manufacturing company that produces a special paste known as "Instant Magic Paste". The product is marketed throughout the country and the demand for the product keeps increasing. The production of the product passes through two processes known as Mixing and Finishing. The following information relates to the production of "Instant Magic Paste" for the month of May 2019. Mixing Process Material Direct labour Production overheads 6,500 kg at a total cost of RM41,500 RM15,400 RM4,590 6% of total input, with a scrap value of RM1.00 per kg. 6,120 kgs Normal loss Actual output Finishing Process Material Labour Overhead 680 kg at a total cost of RM19,800 RM16,250 RM6,260 200 kgs at a total cost of RM2,800 1,000 kgs Opening Work in Progress Closing Work in Progress Degree of completion for both opening and closing work in progress are as follows: Opening Work in Progress Closing Work in Progress 100% From previous process Material Labour Overheads 100% 100% 50% 70% 80% 60% 40% Normal loss for Finishing Process is expected to be 4% of total input and they can be sold at RM2.00 per kg. Actual losses recorded were 300 kgs. Required:
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