Page 145 - Microsoft Word - 00 ACCA F2 Prelims.docx

Prrocess coosting

Lossses in a prrocesss

In many industriaal processees, some innput is lost or damaged during tthe producction
processs. This leads to the cconcept of normal lossses (if the loss is as expected)) and
abnormmal losses or gains (iff the loss iss more or less than eexpected).

There is a step byy step proccedure thaat can be foollowed forr process ccosting andd
losses:

 BBalance thhe units.

 VValue the normal losss.

 CConsider the costs.

 CCalculate tthe averagge cost perr unit.

 VValue the ooutputs annd completee the process account.

 CComplete the normal loss (scraap) accounnt and the aabnormal ggain or loss
aaccount.

Note:: Not all stteps may bbe requiredd – it depennds on wheether the loosses in thhe
proceess can be sold or not.

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