J & G Distilleries makes one of its products by way of three separate stages. Details of production for the month ending 31st January were as follows:                 Process                                                                        Fermenting  Distilling  Bottling Input material: 65,000 litres                     $780,000      -              - Material added                                               -        $89,000            - Direct Labour cost                                   $114,600   $153,500  $225,600 Manufacturing Overhead                       $122,000   $126,000    $193,100 Normal losses                                               8%         5%               5% Output                                          55,000 litres  53,000 litres    48,000 litres Scrap value of losses                        -           $18.00/litre    $30.00/litre   The nature of the process requires equipment to be cleaned at the end of each month; hence there is no opening or closing stock of product in process.   Required:  i) The process account for each process: and ii) The abnormal loss/gain account(s) showing J & G’s true loss/gain.

Question

J & G Distilleries makes one of its products by way of three separate stages. Details of production for the month ending 31st January were as follows:
 
               Process        

                                                               Fermenting  Distilling  Bottling

Input material: 65,000 litres                     $780,000      -              -

Material added                                               -        $89,000            -

Direct Labour cost                                   $114,600   $153,500  $225,600

Manufacturing Overhead                       $122,000   $126,000    $193,100

Normal losses                                               8%         5%               5%

Output                                          55,000 litres  53,000 litres    48,000 litres

Scrap value of losses                        -           $18.00/litre    $30.00/litre
 
 
The nature of the process requires equipment to be cleaned at the end of each month; hence there is no opening or closing stock of product in process.
 
 
Required:
 
i) The process account for each process: and

ii) The abnormal loss/gain account(s) showing J & G’s true loss/gain.

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