No Friction is an industrial lubricant, which is formed by subjecting certain crude chemicals to two successive

Question:

‘No Friction’ is an industrial lubricant, which is formed by subjecting certain crude chemicals to two successive processes. The output of process 1 is passed to process 2, where it is blended with other chemicals. The process costs for period 3 were as follows:
Process 1
Material: 3000kg @ £0.25 per kg
Labour: £120 Process plant time: 12 hours @ £20 per hour
Process 2
Material: 2000kg @ £0.40 per kg
Labour: £84
Process plant time: 20 hours @ £13.50 per hour
General overhead for period 3 amounted to £357 and is absorbed into process costs on a process labour basis.
The normal output of process 1 is 80 per cent of input, while that of process 2 is 90 per cent of input.
Waste matter from process 1 is sold for £0.20 per kg, while that from process 2 is sold for £0.30 per kg.
The output for period 3 was as follows:
Process 1 ............2300kg
Process 2 ............4000kg
There was no stock or work in progress at either the beginning or the end of the period, and it may be assumed that all available waste matter had been sold at the prices indicated.
You are required to show how the foregoing data would be recorded in a system of cost accounts.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: