X plc makes one product, which passes through a single process. Details of the process are as follows: Materials: 5,000 kg at 50p per kg Labour: £800 Production overheads 200% of labour Normal losses are 20 per cent of input in the process, and without further processing any losses can be sold as scrap for 30p per kg. The output for the period was 3,800 kg from the process. There was no work-in-progress at the beginning or end of the period. What value will be credited to the process account for the scrap value of the normal loss? (A) £300 (B) £530 (C) £980 (D) £1,021
X plc makes one product, which passes through a single process. Details of the process are as follows: Materials: 5,000 kg at 50p per kg Labour: £800 Production overheads 200% of labour Normal losses are 20 per cent of input in the process, and without further processing any losses can be sold as scrap for 30p per kg. The output for the period was 3,800 kg from the process. There was no work-in-progress at the beginning or end of the period. What value will be credited to the process account for the scrap value of the normal loss? (A) £300 (B) £530 (C) £980 (D) £1,021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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X plc makes one product, which passes through a single process.
Details of the process are as follows:
Materials: 5,000 kg at 50p per kg
Labour: £800
Production overheads 200% of labour
Normal losses are 20 per cent of input in the process, and without further processing any
losses can be sold as scrap for 30p per kg.
The output for the period was 3,800 kg from the process.
There was no work-in-progress at the beginning or end of the period.
What value will be credited to the process account for the scrap value of the normal loss?
(A) £300
(B) £530
(C) £980
(D) £1,021
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