Norman has a factory that operates a production process called finishing. The normal loss of the finishing process is 7%. Scrapped units out of the process sell for £4.50 per unit. Output from the process is transferred to the inventory ready for sale. Relevant information about costs is as follows. Description Units Amounts in £ Input materials 20500 70000 Transferred to Finished Inventory 17000 Labour and overheads 35000 Normal Loss 7% Scrap Unit £4.50 A). What amount of the abnormal loss will adjust the income statement? Choose one from the following: A. £1,381.00 B. £9,292.50 C. £10,673.50 D. £15,750.00
Norman has a factory that operates a production process called finishing. The normal loss of the finishing process is 7%. Scrapped units out of the process sell for £4.50 per unit. Output from the process is transferred to the inventory ready for sale. Relevant information about costs is as follows. Description Units Amounts in £ Input materials 20500 70000 Transferred to Finished Inventory 17000 Labour and overheads 35000 Normal Loss 7% Scrap Unit £4.50 A). What amount of the abnormal loss will adjust the income statement? Choose one from the following: A. £1,381.00 B. £9,292.50 C. £10,673.50 D. £15,750.00
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...
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Norman has a factory that operates a production process called finishing. The normal loss of the finishing process is 7%. Scrapped units out of the process sell for £4.50 per unit. Output from the process is transferred to the inventory ready for sale.
Relevant information about costs is as follows.
Description
Units
Amounts in £
Input materials
20500
70000
Transferred to Finished Inventory
17000
Labour and
overheads 35000
Normal Loss
7%
Scrap Unit
£4.50
A). What amount of the abnormal loss will adjust the income statement?
Choose one from the following:
A. £1,381.00
B. £9,292.50
C. £10,673.50
D. £15,750.00
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