Cost and Works Accounting 2 MCQs and Notes
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Q 31. The cost of abnormal loss is built into inventory.
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Q 32. If it is assumed that all losses in process occur at the end of the process, units of abnormal loss are costed in exactly the same way in the as units of finished output.
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Q 33. The difference between total actual loss and normal loss is abnormal loss.
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Q 34. When actual loss exceeds normal loss, there is:
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Q 35. The disposal cost of abnormal loss is included in the abnormal loss account and therefore in the transfer of the cost of abnormal loss to the statement of profit or loss.
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Q 36. In some cases, a company might have to pay to dispose of losses in a process. The cost of disposal represents an additional cost to the process. To reflect this in the process account the normal loss is measured at zero but the expected costs of disposal are debited to the process account.
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Q 37. If normal loss has a scrap value the company is able to recover some of the input costs to the process. The scrap value reduces the cost of the process.
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Q 38. If the normal loss has no scrap value it is given a nil value.
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Q 39. Normal loss comes with:
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Q 40. The normal loss is something that is unavoidable in order to get the good output. The cost of the lost units is part of the cost of obtaining the good output.
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