Intermediate: Losses in process (weighted average).

Chemical Processors manufacture Wonderchem using two processes, mixing and distillation. The following details relate to the distillation process for a period:

Closing WIP of 8000kg, which was 100 per cent complete for materials and 50 per cent complete for labour and overheads.
The normal loss in distillation is 10 per cent of fully complete production. Actual loss in the period was 3600kg, fully complete, which were scrapped.
Required:

(a) Calculate whether there was a normal or abnormal loss or abnormal gain for the period. (2 marks)

(b) Prepare the distillation process account for the period, showing clearly weights and values. (10 marks)

(c) Explain what changes would be required in the accounts if the scrapped production had a resale value, and give the accounting entries. (3 marks)
CIMA Stage 1 Cost Accounting

Transcribed Image Text:

No opening work in progress (WIP) Input from mixing Labour for period Overheads for period 36000kg at a cost of 166000 43800 29 200