XYZ plc, a paint manufacturer, operates a process costing system. The following details related to process 2 for the month of October:

There are no further processing costs associated with either paint X or the by-product, but paint Y requires further processing at a cost of £1.50 per litre.
All three products incur packaging costs of £0.50 per liters before they can be sold.
Required:
(a) Prepare the process 2 account for the month of October, apportioning the common costs between the joint products, based upon their values at the point of separation
(b) Prepare the abnormal loss/gain account, showing clearly the amount to be transferred to the profit and loss account.

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Opening work in progress 5000 litres fully complete as to transfers from process 1 and 40% complete as to labour and overhead, valued at £60000 65000 litres valued at cost of £578500 £101400 £80000 £40000 5% of volume transfered from process 1, scrap value £2.00 per litre 30000 litres of paint X (a joint product) 25000 litres of paint Y (a joint product) 7000 litres of by product Z 6000 litres fully complete as to transfers from process 1 and 60% complete as to labour and overhead. Transfer from process 1 Direct labour Variable overhead Fixed ovehead Normal loss Actual output Closing work in progress The final selling price of products X, Y and Z are: Paint X Paint Y Product Z £15.00 per litre £18.00 per litre £4.00 per litre