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Norman has a factory that operates a production process called finishing. The normal loss of the finishing process is 7%. Scrapped units out of the process sell for £4.50 per unit. Output from the process is transferred to the inventory ready for sale. Relevant information about costs is as follows.     Description   Units Amounts in £ Input materials   20500 70000 Transferred to Finished Inventory 17000   Labour and overheads   35000 Normal Loss 7%     Scrap Unit £4.50       A). What amount of the abnormal loss will adjust the income statement? Choose one from the following:   A. £1,381.00   B. £9,292.50   C. £10,673.50   D. £15,750.00

Norman has a factory that operates a production process called finishing. The normal loss of the finishing process is 7%. Scrapped units out of the process sell for £4.50 per unit. Output from the process is transferred to the inventory ready for sale. Relevant information about costs is as follows.     Description   Units Amounts in £ Input materials   20500 70000 Transferred to Finished Inventory 17000   Labour and overheads   35000 Normal Loss 7%     Scrap Unit £4.50       A). What amount of the abnormal loss will adjust the income statement? Choose one from the following:   A. £1,381.00   B. £9,292.50   C. £10,673.50   D. £15,750.00

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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  1. Norman has a factory that operates a production process called finishing. The normal loss of the finishing process is 7%. Scrapped units out of the process sell for £4.50 per unit. Output from the process is transferred to the inventory ready for sale.

    Relevant information about costs is as follows.

     

     

    Description

    		  

    Units

    Amounts in £

    Input materials

    		  

    20500

    70000

    Transferred to Finished Inventory

    17000

    		  

    Labour and overheads

    		  

    35000

    Normal Loss

    7%

    		    

    Scrap Unit

    £4.50

    		    

     

    A). What amount of the abnormal loss will adjust the income statement?

    Choose one from the following:

      A.

    £1,381.00
      B.

    £9,292.50
      C.

    £10,673.50
      D.

    £15,750.00
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