Colours plc is one of the largest manufacturers of both industrial and domestic paints which are subsequently sold to wholesalers , both nationally and internationally. The production of the paints involve 3 production processes , mixing testing and canning . Firstly the ingredients are weighed and blended together in the mixing process and subsequently tested in the laboratory to ensure they comply with quality standards before they are canned

The management accountant of Colours plc has provided you with the following information for the mixing process for August 2020

Input to the material process
6000 litres of pigment , resin and solvent at average cost of €25 per litre 2000 Litres of an additive at an average cost of €5 per litre 5352 Labour Hrs at 50 per litre Variable Overheads are at 25% of Direct Labour Cost Colours plc expects losses of 5% of all ingredients input during its mixing process. Any losses incurred are sold to a local school for €1.25 per litre At the end of August 7400 litres of paint were transferred for the mixing process to the lab for testing

Requirements

(a) Prepare for the month of August

(1) The mixing process account

(2) Normal Loss /Scrap Account

(3) Abnormal Gain/Loss Account

(b) Explain the difference between an abnormal loss and an abnormal gain

(c ) Outline 3 differences between job costing and process costing