Question

UUU Hlustration 3.14 Model: Normal loss with scrap value 500 tonnes of raw material are used for producing a commodity which passes through two processes. The costs are as follows: Process Rs. Process II Rs. Materials Labour Work expenses 10,000 5,000 2,000 2,500 1,000 10% of the material is wasted in the process. The wastage is normal. The scrap real- ized is Rs. 300. You are required to show Process No. I. Account.

Answer 1

Process I A/C
Particulars	Units	Amount	Particulars	Units	Amount
Material	500	10000	Normal Loss	50	300
Labour		5000	Transfer to Process II		16700
Work Expense		2000
		17000			17000

$Cost per unit = \frac{Total cost-Realizable value of normal loss}{Total unit introduction-Normal loss unit}$

$Cost per unit = \frac{17000-300}{500-50}$

$Cost per unit = \frac{16700}{450}$

$Cost per unit = 37.11 per unit$

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