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 UnitsAmounts in £Input materials 2050070000Transferred to Finished Inventory17000 Labour and overheads 35000Normal Loss7% Scrap Unit£4.50 A). What is the cost of the finished goods of the process?Choose one from the following: A.£105,000.00 B.£87,869.00 C.£70,000.00 D.£99,764.00

Normal loss is type of loss which is incurred due to normal business used and that can not be…

Answered: Units Amounts in £ Input materials…

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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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 is the cost of the finished goods of the process?

Choose one from the following:

	A.	£105,000.00
	B.	£87,869.00
	C.	£70,000.00
	D.	£99,764.00

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