Intermediate: Preparation of process accounts with all output fully completed

(a) In a process costing system state what is meant by (i)

normal loss, and (ii) abnormal loss. and indicate how you would treat these items in the cost accounts.

(b) A company makes one product which passes through two processes. From the data given below whtch relates to period 4, you are required to show the transactions which would appear in the two process accounts, finished goods account. abnormal loss account and the abnormal gain account.
Process No. 1 Matenals: 5000 kg at £0.5 per kg Labour: £800 Production overhead 200% on labour Process No.2 Matenals. 4000 kg at £0.8 per kg Labour £1753 Production overhead 100% on labour Normal losses are 20% of input in process 1 and 10% of input in process 2 but without further processing any losses are able to be sold as scrap for £0.3 per kg from process 1 and £0.7 per kg from process 2.
The outputs for period 4 were:
3800 kg from process 1 7270 kg from process 2 There was no work in process at the beginning or end of period 4 and no flni.shed goods stock at the beginning of the period.