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Unit 13: Normal Wastage, Abnormal Loss and Abnormal Gain
Notes
Amount Amount
Particulars kg Particulars kg
(`) (`)
To Finished process 1,760 2,85,200 By Total Cost of casks 1,760 2,88,200
(Refined oil) finished oil c/d (Cost
“ Cost of casks 3,000 per kg ` 163.75)
1,760 2,88,200 1,760 2,88,200
To Cost of casks finished oil 1,760 2,88,200 By Sales @ ` 200 per kg 1,760 3,52,000
(per kg ` 163.75)
“ Profit and Loss a/c 63,800
(Profit per kg ` 36.25)
1,760 3,52,000 1,760 3,52,000
Self Assessment
Fill in the blanks:
1. …………………… represents the portion of a basic raw material lost in processing, having
no recovery value
2. In process type of industry, wastage may have lower ……………………
3. In the case of normal wastage, all …………………… incurred are charged to the good units
of output.
4. Sometimes the percentage of wastage or loss may …………………… the determined
standard percentage of normal wastage.
5. At the end of the accounting year, the abnormal effectives account is transferred to the
…………………… of profit and loss account.
6. The value of the abnormal effectives is …………………… to the concerned process account
and credited to the abnormal effectives account.
7. Oil obtained from refining process is ……………………
8. The product of a factory passes through …………………… processes of manufacture.
State whether the following statements are true or false:
9. Normal Wastage is the amount of loss which is unavoidable because of the nature of raw
materials.
10. Any wastage exceeding the normal percentage is termed normal loss or wastage.
11. If the quantum of wastage is less than the predetermined percentage of normal wastage,
the difference is called as abnormal gain or effectives.
12. The normal wastage takes place at the beginning of the process or during it, it is supposed
that the lost units were never introduced in the process.
13. Crude oil from crushing process is debited.
14. Abnormal loss or wastage is a part of production.
15. Refined oil obtained from refining process is credited.
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