The cost records show the following costs of producing 200 units of a product in a process

      

The cost records show the following costs of producing 200 units of a product in a process
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The normal wastage is 10% of the units and this wastage can be sold in the market at Kshs. 15 per unit. The actual production was 190 units. Prepare process account and the abnormal effectiveness account.

  

Answers


Wilfred
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10 units can be sold for Kshs. 150 only. Therefore the process account has been extra credited with 300 – 150 = Kshs. 150. So the real gain of the abnormal effectiveness is 316.66 – 150 = 166.66. Units 10 x 15 = 150
If there is abnormal wastage in one process but abnormal effectiveness in the other, only the net balance of the two should be carried to the profit and Loss account.
Wilfykil answered the question on April 16, 2019 at 05:01


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