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W Ltd. Chemicals process a range of products including a detergent Blasto, which passes through three processes before completion and transfer to the finished goods

W Ltd. Chemicals process a range of products including a detergent Blasto, which passes through three processes before completion and transfer to the finished goods warehouse. The following data relates to the month of April:

Process 1 Process 2 Process 3 Total

$ $ $ $

Direct material added in process 8,500 9,500 5,500 23,500

Direct wages 4,000 6,000 12,000 22,000

Direct expenses 1,200 930 1,340 3,470

Production overheads 16,500

Output (units) 9,200 8,700 7,900

Normal loss (% of input units) 10 5 10

Scrap value $0.20 $0.50 $1.00

10,000 units at $0.60 each were issued to process 1.

The production overheads are absorbed as a percentage of direct wages.

REQUIRED:

(a) Prepare the following accounts

i) Process 1

ii) Process 2

iii) Process 3

iv) Abnormal Loss

v) Abnormal Gain

vi) distinguish between abnormal loss and abnormal gain

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