Rs. 13,750 1.000 Units 100 Units 900 Units Introduced-Total Cost Normal Wastage-Cost Normal Output Cost 250 Rs. Rs. 13.500 r7 Cost of Abnormal Wastage =Rs.150 x 5 = Rs.750 Note: Abnormal Wastage Account can be prepared as under- ABNORMAL WASTAGE ACCOUNT Particulars Units Amor Particulars Units Amor Rx R. To Process NC 5 750 By Sale proceede 5 125 By Profit & Los Me 625 5 750 750 *5 units of abnormal wastages would also realise Rs. 25 each and hence the loss to be transferred to PLN *5 leas would get reduced Abnormal effectives In case the actual production of a process is more than the expected production, the excess is known as abnormal effectiveness. The presence of abnormal effectiveness should not affect the cost of good units in the normal circumstances. They, therefore, shall be valued at the rate at which the good units would have been valued had there been wastage at the normal rate. The amount shall be debited to the relevant Process Account and credited to "Abnormal Effectives Account" which will be closed by transferring to the Costing Profit and Loss Account Illustration 7: A product passes through three processes, A, B and C. The normal wastage of each process is as follows: Process A-3 per cent Process B-5 per Cent B- Process C-8 per cent Wastage of Process A was sold 25 P. per unit, that of Process B at 50 P. per unit and that of Process Cat Re. I per unit. 10,000 units were issued to Process A in the beginning of October, 1995 at a cost of Re. I per unit. The other expenses were as follows: Process A Process B Process C Rs. Rs. Rs. Sundry Materials 1.000 1.500 500 Labour 5.000 8,000 6,500 Direct expenses 1.050 1.188 2,009 Actual output was Process A 9.500 units Process B 9.100 units Process C 8.100 units Prepare the Process Accounts, assuming that there were no opening or closing stocks. Also give the Abnormal Wastage and Abnormal Effectives Accounts