CA Inter P4 · Chapter 9 · Question 10 of 11
The cost of normal process loss is borne by:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The good units produced
Explanation
Normal loss is an unavoidable feature of the process, so no cost is assigned to it (apart from crediting its scrap value). The cost is spread over the good output, increasing the cost per good unit.
More Process and Operation Costing MCQs
- Q1In Process I, 10,000 kg of material was introduced at ₹24 per kg and conversion costs were ₹1,32,000. Normal loss is 8% of input and has a…
- Q2A process was charged with 6,000 units at a total cost of ₹3,07,200. Normal loss is 10% of input, saleable as scrap at ₹8 per unit. Actual…
- Q3Continuing the same process (abnormal gain of 100 units valued at ₹56 per unit; scrap value of normal loss ₹8 per unit), the net amount…
- Q4Opening work-in-progress was 2,000 units, 60% complete as to conversion. During the period 18,000 units were introduced and 16,000 units…
- Q5Using the same data (opening WIP 2,000 units 60% converted, 16,000 units completed, closing WIP 4,000 units 50% converted), equivalent…