Maf201 Tutorial c2 Process Costing Fe

1
MAF201 TUTORIAL
CHAPTER 2:
PROCESS COSTING
MAF201 FINAL EXAM QUESTIONS – ANSWER KEY

TUTORIAL
2
◻ Final Exam Questions:

July 2023
Feb 2022
July 2021
July 2020
Dec 2019
June 2019
Dec 2018
June 2018
Jan 2018
March 2017
Oct 2016
March 2016
Sept 2015
March 2015
3 FE JULY 2023 Q2
* Information from Q
*** **** Figures from Workings below

FE JULY 2023 Q2
Mixing Process account
4
Units CPU Total Units CPU Total
RM RM RM RM
Direct Materials 75,000* 7.05* 528,750 Trans to 65,500 15.50** 1,015,250
Heating
Direct labour 412,500 Normal Loss 7,500*** 1.50* 11,250
Prod OH 116,250 Abnormal Loss 2,000**** 15.50** 31,000
75,000 1,057,500 75,000 1,057,500
Balanced Dr and Cr!

Cost per Unit = Total Input Cost – NL Scrap Value
Expected Output Units NL = 10% x 75,000 = 7,500***
AL = Actual Loss – NL
= RM1,057,500 – 11,250 = 9,500 – 7,500
75,000 – 7,500 = 2,000****
= RM15.50/kg**
** Figures from Statement of Cost and Evaluation

FE JULY 2023 Q2 *** **** Figures from Workings below
Heating Process account
5

RM RM RM RM
OWIP 2,500* 135,000 FG 66,600* 2,130,939**
Trans from 65,500 15.50 1,015,250 Normal 4,676*** 2.50* 11,690**
Mixing Process Loss
Direct labour 493,275* CWIP 1,200* 26,880**
Production OH 396,180*
Abnormal Gain 4,476**** 129,804**
72,476 2,169,509 72,476 2,169,509
Balanced Dr and Cr!

PROD = OWIP + TRANS - CWIP NL = 7% x 66,800 = 4,676***
= 2,500 + 65,500 – 1,200 AG = Output - Input
= 66,800 [FG+NL-AG] = 66,600 + 4,676 + 1,200 – 2,500 –
65,500
= 4,476****
FE JULY 2023 Q2
6
Statement of Equivalent Unit [FIFO]
% left to be process
Input Output Trans-in Direct Labour Prod OH

From P1
% Units % Units % Units
OWIP 2,500 OWIP 2,500 0 30% 750 50% 1,250
TF P1 65,500 CP 64,100 100 64,100 100 64,100 100 64,100
NL 4,676 100 4,676 100 4,676 100 4,676
AG (4,476) 100 (4,476) 100 (4,476) 100 (4,476)
CWIP 1,200 100 1,200 60% 720 40% 480
68,000 68,000 65,500 65,770 66,030

Balanced Inputand Output!
Figures go to Statement of Cost and Evaluation
INPUT = OUTPUT
CP = INPUT – OWIP – NL + AG - CWIP
68,000 = OWIP + CP – NL + AG -
= 68,000 – 2,500 – 4,676 + 4,476 –
CWIP
1,200
= 66,600 – 4,676 + AG - 1,200
= 64,100
= 4,476
FE JULY 2023 Q2
Statement of Cost and Evaluation [FIFO]
7 Cost Trans- in D Labour Prod OH Total
RM RM RM
Current Cost RM1,015,250 RM493,275 RM396,180
Total EQ units 65,500 65,770 66,030
= Cost per EQ unit Figures from Statement of Equivalent Unit
= RM15,50 = RM7.50 = RM6.00 RM29.00
Evaluation of:
Finished Goods
a. OWIP b/d 135,000
b. OWIP - 750 x RM7.50 1,250 x RM6.00 13,125
c. CP 64,100 x RM29.00 1,858,900
d. Net NL 4,676 x RM29.00 123,914

= NL Value – NL SV =RM135,604
= RM135,604 – RM11,690
Total 2,130,939
AG 4,476 x RM29.00 129,804
CWIP 1,200 x RM15.50 720 x RM7.50 480 x RM6.00 26,880

Figures go to Heating Process a/c
FE JULY 2023 Q2
8
Joint Products By-products

Two or more main products produced An incidental product produced from
from the same operation process. the common processing operation.
Each of the product has a The product has an insignificant sales
significant sales value as the main value as compared to the main
products. products.
9 FE FEB 2023 Q2
*** Figures from Workings below

FE FEB 2023 Q2
Blending Process account
10
RM RM RM RM
Direct Materials 19,500* 136,500* Trans to Bottling 18,100 13.00** 235,300
Direct labour 60,000* Normal Loss 1,170 2.00* 2,340
Prod OH 44,130* Abnormal Loss 230*** 13.00** 2,990
19,500 240,630 19,500 240,630
Balanced Dr and Cr!

Expected Output Units NL = 6% x 19,500 = 1,170
AL = Actual Loss – NL
= RM240,630 – RM2,340 = 1,400 – 1,170
19,500 – 1,170 = 230***
= RM13.00**
** Figures from Statement of Cost and Evaluation

FE FEB 2023 Q2
Bottling Process account
11
RM RM RM RM
OWIP 600* 2,600* FG 15,910 237,020**
Trans from 18,100 235,300 Normal Loss 1,190*** 2.00* 2,380

Blending Process
Add Materials 1,000* 18,660* CWIP* 2,700 36,072**
Direct labour 14,416*
Production OH 3,096*
Abnormal Gain 100**** 1,400**
19,800 275,472 19,800 275,472
NL = 7% x 17,000 = 1,190***
PROD = OWIP + TRANS + ADD MATERIAL - CWIP
AG = Actual Loss – NL
= 600 + 18,100 + 1,000 -2,700
= 1,090 – 1,190
= 17,000 [FG+NL-AL]
= 100****
FE FEB 2023 Q2
12
Statement of Equivalent Unit [WAM]
Input Output Trans-in Materials Direct Labour Prod OH

From P1
% Units % Units % Units % Units
TF P1 19,700 CP 15,910 100 15,910 100 15,910 100 15,910 100 15,910
NL 1,190 100 1,190 100 1,190 100 1,190 100 1,190
AG (100) 100 (100) 100 (100) 100 (100) 100 (100)
CWIP 2,700 100 2,700 80% 2,160 60% 1,620 40% 1,080
19,700 19,700 19,700 19,160 18,620 18,080
Balanced Input & Output

Figures go to Statement of Cost and Evaluation
FE FEB 2023Statement
Q2 of Cost and Evaluation [WAM]
13 Cost Trans- in Added D Labour Prod OH Total
RM Materials RM RM
OWIP/Previous Cost + RM1,100 + RM500 + RM480 + RM520 +
Current Cost RM235,300 RM18,660 RM14,416 RM3,096
Total Cost RM236,400 RM19,160 RM14,896 RM3,616 RM14.00
Total EQ units 19,700 19,160 18,620 18,080
= Cost per EQ unit Figures from Statement of Equivalent Unit
= RM12.00 = RM1.00 = RM0.80 = RM0.20
Evaluation of:
Finished Goods
c. CP 15,910 x RM14.00 222,740
d. Net NL 1,190 x RM14.00 14,280

= RM16,660 – RM2,380
= RM14,280
Total 237,020
AG 100 x RM14.00 1,400
CWIP 2,700 x RM12.00 2,160 X RM1.00 1,620 x RM0.80 1,080 x RM0.20 ?

Figures go to Bottling Process a/c
FE FEB 2023 Q2
14
Examples
Job Costing It is used for unique products A custom home builder
Is used for very small production A residential plumbing
runs
Process It is used for standardized products A cell phone manufacturer
Costing It is used for large production runs A manufacturer of
multivitamins
15 FA JULY 2022 Q2
FA JULY 2022 Q2
Assembly Process account
16
RM RM RM RM
Direct Materials 20,000 99,150 Trans to 19,300 13.80 266,340
Finishing
Add Materials 40,050 Normal Loss 600 3.00 1,800
Direct labour 70,750 Abnormal Loss 100 13.80 1,380
Prod OH 59,570
20,000 269,520 20,000 269,520

Expected Output Units
NL = 3% x 20,000 = 600
= RM269,520 – RM1,800 AL = Actual Loss – NL
20,000 – 600 = 700 - 600
= RM13.80
FA JULY 2022 Q2
Finishing Process account
17
RM RM RM RM
OWIP 1,400 49,700 FG 18,400 496,736
Trans from 19,300 13.80 266,340 Normal Loss 760 3,040

Assembly Process
Add Materials 51,948 CWIP 1,700 34,442
Direct labour 86,310
Production OH 75,920
Abnormal Gain 160 4,000
20,860 534,218 20,860 534,218
NL = 4% x 19,000 = 760
PROD = OWIP + TRANS - CWIP
AG = Actual Loss – NL
= 1,400 + 19,300 – 1,700
= 600 – 760
= 19,000 [FG+NL+AL]
= 160
FA JULY 2022 Q2
18
Input Output Trans-in Added Direct Labour Prod OH

From P1 Materials
OWIP 1,400 OWIP 1,400 0 20% 280 40% 560 50% 700
TF P1 19,300 CP 17,000 100 17,000 100 17,000 100 17,000 100 17,000
NL 760 100 760 100 760 100 760 100 760
AG (160) 100 (160) 100 (160) 100 (160) 100 (160)
CWIP 1,700 100 1,700 80% 1,360 60% 1,020 40% 680
20,700 20,700 19,300 19,240 19,180 18,980
CP = INPUT – OWIP – NL + AG - CWIP

= 19,300 –1,400 – 760 + 160 – 1,700
= 17,000
FA JULY 2022 Q2
19 Cost Trans- in Added D Labour Prod OH Total
RM Materials RM RM
Total EQ units 19,300 19,240 19,180 18,890
= Cost per EQ unit = RM13.80 = RM2.70 = RM4.50 = RM4.50 RM25.00
Evaluation of:
Finished Goods
a. OWIP b/d 49,700
b. OWIP - 280 X RM2.70 560 x RM4.50 700 x RM4.50 6,076
=RM = RM = RM
c. CP 17,500 x RM25.00 425,000
d. Net NL 760 x RM25.00 15,960

= RM19,000 – RM3,040
= RM15,960
Total ?
AG 160 x RM25.00 ?
CWIP 1,700 x RM13.80 1,360 X RM2.70 1,020 x RM4.50 680 x RM4.50 ?

FA JULY 2022 Q2
20
◻ 4 possible reasons of having Abnormal Loss:

Use of inefficient equipment
Use of sub-standard/low quality of input materials
Use of untrained or unskilled workers
Frequent electricity breakdown
Improper supervision
(or any other acceptable answers)
21 FA FEB 2022 Q2
FA FEB 2022 Q2
Moulding Process account
22
RM RM RM RM
Direct Material 20,000 144,000 Trans to 19,100 14.50 276,950
Finishing
Direct Labour 72,000 Normal Loss 1,000 1.20 1,200
Production OH 60,700
Abnormal Gain 100 14.50 1,450
20,100 278,150 20,100 278,150

= RM276,000 – RM1,200 NL = 5% x 20,000 = 1,000

20,000 – 1,000
= RM14.50
FA FEB 2022 Q2
23
RM RM RM RM
OWIP 1,000 66,000 FG 18,500 497,436
Trans from 19,100 14.50 276,950 Normal Loss 980 1,960

Moulding Process
Direct Labour 108,920 Abnormal 120 2,784
Loss
Production OH 60,605 CWIP 500 10,295
20,100 512,475 20,100 512,475
NL = 5% x 19,600 = 980
PROD = OWIP + TRANS - CWIP AL = INPUT – FG –NL –CWIP FG = 18,500
= 1,000 + 19,100 – 500 = 20,100 – 18,500 – 980 – [given]
= 19,500 [FG+NL+AL] 500
= 120
FA FEB 2022 Q2
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Input Output Trans-in Direct Labour Prod OH

From P1
OWIP 1,000 OWIP 1,000 0 50 500 60 600
TF P1 19,100 CP 17,500 100 17,500 100 17,500 100 17,500
NL 980 100 980 100 980 100 980
AL 120 100 120 100 120 100 120
CWIP 500 100 500 80 350 50 350
20,100 20,100 19,100 19,450 19,550
CP = INPUT – OWIP – NL – AL - CWIP

= 20,100 –1,000 – 980 – 120 - 500
= 17,500
FA FEB 2022 Q2
25 Cost Trans- in D Labour Prod OH Total
RM RM RM
Current Cost RM276,950 RM108,920 RM60,605
Total EQ units 19,100 19,450 19,550
= Cost per EQ unit = RM14.50 = RM5.60 = RM3.10 RM23.20
Evaluation of:
Finished Goods
a. OWIP b/d 66,000
b. OWIP - 500 x RM5.60 600 x RM2.55 406,000
= RM = RM
c. CP 17,500 x RM23.20
d. Net NL 980 x RM23.20 20,776
= RM22,736 – RM1,960
= RM20,776
Total ?
AL 120 x RM23.20 ?
CWIP 500 x RM14.50 350 x RM5.60 350 x RM3.10 ?
FA FEB 2022 Q2
26
CRITERIA NORMAL LOSS ABNORMAL LOSS
Treatment in Cost of normal loss is borne by Cost of abnormal losses is not borne by
accounts the remaining good units. the remaining good units.
the cost of normal losses is included the cost of abnormal losses is treated as
as part of the cost of good period cost and is valued on the same basis
production, and therefore, the cost of as good production. The cost is written off
normal loss is absorbed into the cost in the statement of profit or loss at the end
of completed production. of the accounting period.
Part of cost It is treated as a part of cost. It is charged to profit and loss account
(SOPL) and not being treated as a part
of cost.
Explain TWO (2) reasons why joint costs need to be apportioned to each joint product
produced by the company.
- To value the closing inventories of each joint product
- To compute the costs of each joint product
- To compute the profitability of each joint product
- To calculate the Selling Price
(or any other relevant answers
27 FA JULY 2021Q2
FA JULY 2021
Cutting Process account
28

RM RM RM RM
Direct Material 1,000 3,000 Trans to 800 9.50 7,600
Sewing
Direct Labour 2,400 Normal Loss 100 1.90 190
Overhead 3,340 Abnormal Loss 100 9.50 950
1,000 9,740 1,000 9,740

= RM8,740 – RM190
1,000 - 100
= RM9.50
FA JULY 2021
Sewing Process account
29

RM RM RM RM
OWIP 450 5,394 FG 1,110 22,488
Trans from Cutting 800 7,600 CWIP 50 694

Process
Added Material 1,000 Normal Loss 120 1.20 144
Direct Labour 5,000
Overhead 3,780
Abnormal Gain 30 552

1,280 23,326 1,280 23,326
PROD = OWIP + TRANS - CWIP AG = NL – Actual Loss FG = INPUT – CWIP - NL

= 450 +800 – 50 = 120 - 90 = 1,280 – 50 - 120
= 1,200 = 30 = 1,110
NL = 10% X 1,200 = 120
FA JULY 2021
30
Input Output From Add Direct Overheads
Cutting Material Labour
OWIP 450 FG 1,110 100 1,110 100 1,110 100 1,110 100 1,110
Trans in 800 CWIP 50 100 50 70 35 60 30 40 20
NL 120 100 120 100 120 100 120 100 120
AG [30] 100 [30] 100 [30] 100 [30] 100 [30]
1,250 1,250 1,250 1,235 1,230 1,220

FA JULY 2021
Statement of Cost and Evaluation [WAM]
31 Cost Material Add Material Direct Labour Overhead Total
RM RM RM RM RM
Previous Cost + RM2,900 + RM976 + RM1,150 + RM368 +
Current Cost RM7,600 RM1,000 RM5,000 RM 3,780
Total EQ units 1,250 1,235 1,230 1,220
Evaluation of:
Finished Goods
FG 1,110 X RM18.40 569,905
Net NL 120 x RM18.40 2,064
= RM2,208 – RM144
=RM2,064
Total ?
AG 30 x RM18.40 552
CWIP 50 x RM8.40 35 x RM1.60 30 x RM5.00 20 x RM3.40 694
=RM =RM =RM = RM
FA JULY 2021
32
CRITERIA NORMAL LOSS ABNORMAL LOSS
Expectation Expected Loss Unexpected Loss

Occurrence Occurs due to the inherent nature Occurs due to abnormal conditions
of the materials and production or due to mishap, mischief, and
process under normal inefficiency.
conditions
Controllability Uncontrollable Controllable
Prevention / Cannot be prevented / Can be prevented from occurring again
Avoidability unavoidable / avoidable
Causes Arises due to reasons like arises due to reasons like fire, riot,
evaporation, normal leakage, flood, theft, plant breakdown, sub-standard
spoilage, loss of weight, drying material, carelessness,
etc. inefficient operation, accident etc.
Treatment in Cost of normal loss is borne by Cost of abnormal losses is not borne by
accounts the remaining good units. the remaining good units.
Part of cost It is treated as a part of cost. It is charged to profit and loss account
(SOPL) and not being treated as a part
of cost.
33 FA FEB 2021 Q2
FA FEB 2021 Q2
Roasting Process account
34
RM RM RM RM
Packaging
Direct Labour 12,000 Abnormal Loss 3,000 5.00 15,000
Direct expenses 10,000 No losses are expected to be incurred in this

process. So, no NL.
Production OH 8,000
15,000 75,000 15,000 75,000

= RM75,000 – RM0
15,000 - 0 AL = INPUT – OUTPUT
= RM5.00 = 15,000 – 12,000
= 3,000
FA FEB 2021 Q2
Packaging Process account
35
RM RM RM RM
OWIP 1,400 17,000 FG 17,000 126,224
Trans from Roasting 12,000 5.00 60,000 CWIP 1,000 5,200

Process
Added Material 5,000 4.00 20,000 Normal Loss 1,290 1.40 1,806
Conversion cost 30,000

19,290 133,230 19,290 133,230
NL = 400 + 890 = 1,290

AG = 890 [lesser than NL]
FG = 17,000
FA FEB 2021 Q2
36
Input Output From P1 Add Material Conversion
costs
OWIP 1,400 FG 17,000 100 17,000 100 17,000 100 17,000
Trans in 12,000 CWIP 1,000 100 1,000 60 600 40 400
Material 5,000 NL 1,290 100 1,290 100 1,290 100 1,290
AG [890] 100 [890] 100 [890] 100 [890]
18,400 18,400 18,400 18,000 17,800
Transfer these figures to Statement of Cost and Evaluation

Figures from Statement of Equivalents Units
FA FEB 2021 Q2
37
Cost Material Add Material Conversion cost Total

RM RM RM RM
Previous Cost + RM4,400 + RM7,000 + RM5,600 +
Total EQ units 18,400 18,000 17,800
Evaluation of:
Finished Goods
FG 17,000 X RM7.00 119,000
Net NL 1,290 x RM7.00 7,224
= RM9,030 – RM1,806
= RM7,224
Total ?
AG 890 x RM7.00 6,230
CWIP 1,000 x RM3.50 600 x RM1.50 400 x RM2.00 5,200
=RM =RM =RM
FA FEB 2021 Q2
38
2c. List of industries

◻ 1. Textiles
◻ 2. Chemicals
◻ 3. Food and beverages
◻ 4. Electricity components
Or any acceptable answers
(names of companies are not acceptable. It should be the industries)
2d.
◻ Normal loss is an expected and unavoidable loss that occurs
under efficient operating condition. Normal loss is treated as
part of the cost of good production unit conditions.
39 FA JULY 2020 Q2
FA JULY 2020
40
Splitting Process account
RM RM RM RM
Direct Material 2,000 10,500 To Mixing 2,120 17.00 36,040
Process
Prod Overhead 2,800
AG 220 17.00 3,740
2,220 36,240 2,220 36,240

= RM32,500 - RM2,000
2,000 - 100 AG = ACTUAL OUTPUT – EXPECTED OUTPUT
= 2,120 – 1,900
= RM17 = 220
FA JULY 2020
41
RM RM RM RM
OWIP 650 9,750 FG 3,680 106,047
Trans From 2,120 36,040 Normal Loss 437 437

Slitting
Direct Material 1,600 32,000 CWIP 120 2,869
Direct Labour 25,200 Abnormal Loss 133 3,637
Prod OH 10,000
4,370 112,990 4,370 112,990
OWIP 650 AL = EXPECTED OUTPUT – ACTUAL OUTPUT

+ TRANS 2,120 = 3,933 – 3,800
+ DM 1,600 = 133
PROD 4,370
NL = 10% x 4,370 = 437

FA JULY 2020
42
Input Output Trans-in Direct Material Direct Labour Prod OH

From P1
OWIP 350 OWIP 650 0 - 0 30 195 40 260
TF P1 2,120 CP 3,030 100 3,030 100 3,030 100 3,030 100 3,030
Material 1,600 NL 437 100 437 100 437 100 437 100 437
AL 133 100 133 100 133 100 133 100 133
CWIP 120 100 120 90 108 80 96 50 60
4,370 4,370 3,720 3,708 3,891 3,920
CP = INPUT – OWIP – NL – AL - CWIP

= 43,700 –650 – 437 – 133 - 120
= 3,030
FA JULY 2020
43 Cost Trans- in D Material D Labour Prod OH Total
RM RM RM RM
Total EQ units 3,720 3,708 3,891 3,920
Evaluation of:
Finished Goods
a. OWIP b/d 9,750
b. OWIP - 195 x RM6.48 260 x RM2.55 1,896.60
= RM1,263.60 = RM633
c. CP 3,030 x RM27.35
d. Net NL 437 x RM27.35 11,514.95
= NL Value – NL SV =RM11,951.95
= RM11,951.95 – RM437
= RM11,514.95
Total ?
AL 133 x RM27.35 ?
CWIP 120 x RM9.69 108 x RM8.63 96 x RM6.48 60 x RM2.55 ?
44 FE DEC 2019
FE DEC 2019
45
Moulding Process account
RM RM RM RM
Direct Material 30,000 4.50 135,000 To Drying 25,800 9.20 237,360
Process
Direct Labour 44,250 Normal Loss 4,500 1.20 5,400
Prod Overhead 60,750
AG 300 9.20 2,760
30,300 242,760 30,300 242,760
Cost per Unit = Total Input Cost – NL Scrap Value AG = INPUT – TRANS - NL
Expected Output Units = 30,000 – 25,800 -4,500
= 300
= RM240,000 - RM5,400
30,000 – 4,500 @
AG = ACTUAL OUTPUT - EXPECTED OUTPUT
= 25,800 - 25,500
= RM9.20 = 300
FE DEC 2019
Drying Process account
46
RM RM RM RM
OWIP 1,500 17,350 FG 22,500 382,606
From Moulding 25,800 9.20 237,360 Normal Loss 1,215 2,430
Add. Material 81,120 Abnormal Loss 585 9,594
Conversion Cost 100,800 CWIP 3,000 42,000
27,300 436,630 27,300 436,630
OWIP 1,500 AL = ACTUAL LOSS - NL

+ TRANS 25,800 = 1,800 – 1,215
- CWIP 3,000 = 585
PROD 24,300
FG = INPUT – NL – AL - CWIP
NL = 5% x 24,300 = 1,215 = 27,300 – 1,215 – 585 – 3,000
= 22,500
FE DEC 2019
47
Input Output Trans-in Add Material Conversion
From P1 Cost
OWIP 1,500 OWIP 1,500 0 0 20 300 40 600
TF P1 25,800 CP 21,000 100 21,000 100 21,000 100 21,000
Material NL 1,215 100 1,215 100 1,215 100 1,215
AL 585 100 585 100 585 100 585
CWIP 3,000 100 3,000 75 2,250 60 1,800
27,300 27,300 25,800 25,350 25,200
Transfer these figures to Statement of Cost and Evaluation
CP = INPUT – OWIP – NL – CWIP- AL

= 27,300 – 1,500 – 1,215 – 3,000 - 585
= 21,000
Figures to Statement of Equivalent Units
FE DEC 2019
48 Cost Trans- in Material Conversion Cost Total
RM RM RM RM
Total EQ units 25,800 25,350 25,200
Evaluation of:
Finished Goods
a. OWIP b/d 17,350
b. OWIP - 300 x RM3.20 600 x RM4.00 3,360
= RM960 = RM2,400
c. CP 21,000 x RM16.40 344,400
d. Net NL 1,215 x RM16.40 17,496
= RM19,926 – RM2,430
Total ?
AL 585 x RM16.40 9,594
CWIP 3,000 x RM9.20 2,250 x RM3.20 1,800 x RM4.00 42,000
FE DEC 2019
49
Characteristic of Process Costing:

◻ Output produce is in large volume, very identical and come from a
continuous flow of processes,
◻ Output of one process becomes the input for the next process,
◻ Process cost centres are set-up and all costs (direct or indirect
costs) incurred during the period are charged to each process, then
a total process costs for each is obtained,
◻ A separate account is kept for each process,
◻ Total process costs of each process are being averaged or shared
equally among the cost units produced in that process during the
period.
◻ Loss or waste may arise during processing
◻ Joint-product or by-product often results from the processes.
FE DEC 2019
50
◻ TWO (2) methods use in the apportionment of joint cost in

joint product costing.
Physical measurement method

Sales value method
Sales value at split off point method / Net Realisable Value
method
51 FE JUNE 2019
FE JUNE 2019
52
RM RM RM RM
Material 6,500 41,500 Transfer to 6,120 10.00 61,200
Finishing
Labour 15,400 Normal Loss 390 1.00 390
Overhead 4,590
AG 10 100
6,510 61,590 6,510 61,590
Cost per Unit = Total Input Cost – NL Scrap Value Normal Loss
Expected Output Units = 6% x 6,500
= 390 units
= RM61,490 - RM390
6,500 – 390 AG = INPUT – TRANS - NL
= 6,500 – 6,120 - 390
= RM10.00 = 10
FE JUNE 2019
53
RM RM RM RM
OWIP 200 2,800 FG 5,700 92,140
From Mixing 6,120 61,200 Normal Loss 280 2.00 560
Material 680 19,800 CWIP 1,000 13,300
Labour 16,250 Abnormal Loss 20 310
Overhead 6,260
7,000 106,310 7,000 106,310
Normal Loss AL =ACTUAL LOSS - NL
= 4% X [200 + 6,120 + 680] = 300 - 280
= 280 units = 20
FG = INPUT – NL – CWIP - AL
= 7,000 - 280 – 1,000 - 20
= 5,500
FE JUNE 2019
54
Input Output Trans-in Material Labour OH
From P1
OWIP 200 OWIP 200 0 0 0 0 50 100 30 60
TF P1 6,120 CP 5,500 100 5,500 100 5,500 100 5,500 100 5,500
Material 680 NL 280 100 280 100 280 100 280 100 280
AL 20 100 20 100 20 100 20 100 20
CWIP 1,000 100 1,000 80 800 60 600 40 400
7,000 7,000 6,800 6,600 6,500 6,260

= 7,000 -200 – 280 – 1,000 - 20
= 5,500
FE JUNE 2019
55
Cost Trans- in Material Labour OH Total
RM RM RM RM RM
Total EQ units 6,800 6,600 6,500 6,260
= Cost per EQ unit = RM9 = RM3 = RM2.50 = RM1 RM15.50
Evaluation of:
Finished Goods
a. OWIP b/d 2,800
b. OWIP - - 100 x RM2.50 60 x RM1 310
=RM250 = RM60
c. CP 5,500 x RM15.50 85,250
d. Net NL 280 x RM15.50 3,780
= RM4,340 – RM560
Total ?
AL 20 x RM15.50
CWIP 1,000 x RM9 800 x RM3 600 x RM2.50 400 x RM1 13,300
FE JUNE 2019
56
◻ Joint product - Joint product refers to two or more products that

are produced in the same processing operation, emerging from
the same raw materials input. They have their own substantial value such
that no single product can be regarded as a single product.
◻ By-product - by-product is a product incidentally produced in
producing the main product. lt has lower sales value as compared
with the main product.
◻ Classify the following items into a normal loss or

abnormal loss
Evaporation of material during process – Normal loss
Loss due to the inefficient working of new employees -
Abnormal loss
Unexpected defect of material - Abnormal loss
Unavoidable loss of material - Normal loss
57 FE DEC 2018
FE DEC 2018
58
Process A account
RM RM RM RM
Direct Material 10,000 6.95 69,500 FG to Process B 9,850 13.00 128,050
Direct Labour 45,000 Normal Loss 500 0 0
Overhead 9,000
AG 350 4,550
10,350 128,050 10,350 128,050

= RM123,500 AG = INPUT – FG - NL
10,000 – 500 = 10,000 – 9,850 - 500
= 350
= RM13.00
FE DEC 2018
59
Process B account
Units CPU Total Units CP Total
RM RM U RM
RM
OWIP 2,500 30,000 FG 24,460 375,333
From Process 9,850 13.00 128,050 Normal Loss 1,370 0.50 685
A
Material 15,760 151,500 CWIP 1,800 20,880
Labour 78,630 Abnormal Loss 480 7,008
Overhead 15,726
28,110 403,906 28,110 403,906
AL = INPUT – FG – NL - CWIP
= 28,110 – 24,460 – 1,370 – 1,800
= 480
FE DEC 2018
60
Input Output Input Add Labour OH
Material Material
OWIP 2,500 OWIP 2,500 0 - 0 - 60 1,500 60 1,500

TF P1 9,850 CP 21,960 100 21,960 100 21,960 100 21,960 100 21,960
Material 15,760 NL 1,370 100 1,370 100 1,370 100 1,370 100 1,370
AL 480 100 480 100 480 100 480 100 480
CWIP 1,800 100 1,800 80 1,440 50 900 50 900
28,110 28,110 25,610 25,250 26,210 26,210

= 28,110 – 2,500 – 1,370 – 1,800 - 480
= 21,960
FE DEC 2018
61
Cost Material Add Material Labour OH Total
RM RM RM RM RM
Total EQ units 25,610 25,250 26,210 26,210
= Cost per EQ unit = RM5 = RM6 = RM3 =RM0.60 RM14.60
Evaluation of:
Finished Goods
a. OWIP b/d 30,000
b. OWIP - - 1,500 x RM3 1,500 x RM0.60 5,400
=RM = RM
c. CP 21,960 x RM14.60 320,616
d. Net NL 1,370 x RM14.60 19,317
= RM20,002 – RM685
Total ?
AL 480 x RM14.60 7,008
CWIP 1,800 x RM5 800 x RM3 600 x RM2.50 400 x RM1 20,880
FE DEC 2018
62
◻ Two causes of abnormal loss:

1. Carelessness
2. Rough handling of material
3. Lack of proper knowledge/expertise
4. Low quality of raw materials
5. Machine breakdown
6. Accident in factory area
63 FE JUNE 2018
FE JUNE 2018
64
Process A account
RM RM RM RM
Direct Material 8,000 30.00 240,000 FG to Process B 7,000 50.00 350,000
Direct Labour 80,000 Normal Loss 400 10.00 4,000
Overhead 64,000 Abnormal Loss 600 50.00 30,000
8,000 384,000 8,000 384,000

= RM384,000 – RM4,000 AL = INPUT – TRANS - NL

8,000 – 400 = 8,000 – 7,000 - 400
= 600
= RM50.00
FE JUNE 2018
65
Process B account
Units CPU Total Units CP Total
RM RM U RM
RM
OWIP 1,000 54,740 FG 7,000 491,940
From Process A 7,000 350,000 Normal Loss 400 4,000
Material 69,600 CWIP 800 49,440
Conversion Cost 57,440

8,200 545,380 8,200 545,380
CWIP = OWIP + Trans in +AG – FG – NL Expected Loss/NL = 400

= 1,000 + 7,000 + 200 – 7,000 – 400 Actual Loss/Scrap = 200
= 800 EL > AL = Abnormal Gain
FE JUNE 2018
66
Input Output TFPA Material Conversion
Cost
OWIP 1,000 OWIP 1,000 0 - 20 200 50 500
TF PA 7,000 CP 6,000 100 6,000 100 6,00 100 6,000
Material NL 400 100 400 100 400 100 400
CWIP 800 100 800 70 560 60 480
AG [200] 100 [200] 100 [200] 100 [200]
8,000 8,000 7,000 6,960 7,180
CWIP = OWIP + Trans in +AG – FG – NL

= 1,000 + 7,000 + 200 – 7,000 – 400
= 800
FE JUNE 2018
67 Cost TFPA Material Conversion Cost Total
RM RM RM RM
Total EQ units 7,000 6,960 7,180
= Cost per EQ unit = RM50 = RM10 = RM8 RM68.00
Evaluation of:
Finished Goods
a. OWIP b/d 54,740
b. OWIP - 200 x RM10 500 x RM8 6,000
= RM2,000 =RM4,000
c. CP 6,000 x RM68.00 408,000
d. Net NL 400 x RM68.00 23,200
= RM27,200 – RM4,000
Total ?
AG 200 x RM68.00 13,600
CWIP 800 x RM50 560 x RM10 480 x RM8.00 49,440
FE JUNE 2018
68
◻ FOUR (4) characteristics of process costing:

Produce similar or homogenous products
Produce goods to meet sales demand and not for custom-made orders
Used in mass production.
Output from one process will be the input in the next process.
◻ Normal losses are inherent in the production process and cannot be

eliminated.
◻ These losses occur under efficient operating conditions and are
unavoidable.
◻ Abnormal losses are not an inherent part of the production process
and arise from inefficiencies. They are avoidable losses and treated
as a period cost and written off to the profit and loss account at end
of the accounting period.
69 FE JAN 2018
FE JAN 2018
70
Cooking Process account
RM RM RM RM
Direct Material 10,000 55,000 Transfer to 8,500 9.30 79,050
Packaging
Additional 9,900 Normal Loss 1,000 1.20 1,200
Material
Conversion Cost 20,000 Abnormal Loss 500 4,650
10,000 84,900 10,000 84,900

= RM84,900 – RM1,200
AL = INPUT – TRANS - NL
10,000 – 1,000 = 10,000 – 8,500 – 1,000
= 500
= RM9.30
FE JAN 2018
71
Packaging Process account
RM RM RM RM
From Cooking 8,500 9.30 79,050 FG 7,100 77,872
Additional 3,360 Normal Loss 780 1.50 1,170

Material
Conversion Cost 5,908 CWIP 1,200 12,108
OWIP 500 2,000
Abnormal Gain 80 10.40 832

9,080 91,150 9,080 91,150
Expected Loss/NL =
AG = FG + NL + CWIP – TRANS - OWIP
Actual Loss/Scrap = 700
= 7,100 + 780 + 1,200 – 8,500 – 500
EL > AL = Abnormal Gain
= 80
FE JAN 2018
72
Input Output TFPA Material Conversion
Cost
OWIP 500 OWIP 500 0 - 40 200 60 300
TF C 8,500 CP 6,600 100 6,600 100 6,600 100 6,600
Material NL 780 100 780 100 780 100 780
CWIP 1,200 100 1,200 75 900 70 840
AG [80] 100 [80] 100 [80] 100 [80]
9,000 9,000 8,500 8,400 8,440
CP = INPUT – OWIP – NL –CWIP - AG

= 9,000 – 500 – 780 1,200 - -80
= 6,600
FE JAN 2018
Cost TFC Material Conversion Cost Total
73 RM RM RM RM
Total EQ units 8,500 8,400 8,440
Evaluation of:
Finished Goods
a. OWIP b/d 2,000
b. OWIP - 200 x RM0.40 300 x RM0.70 290
= RM80 =RM210
c. CP 6,600 x RM10.40 68,640
d. Net NL 780 x RM10.40 6,942
= RM8,112 – RM1,170
=RM6,942
Total 77,871
AG 80 x RM10.40 832
CWIP 1,200 x RM9.30 900 x RM0.40 840 x RM0.70 12,108
FE JAN 2018
74
◻ FOUR (4) methods of allocating joint costs:

Physical measures method
Sales Value at Split-off Point method
Net Realizable Value method
Constant Gross Profit Percentage method
◻ Distinguish between normal loss and abnormal loss:

Normal losses are unavoidable losses that are inherent to
the production process whereas abnormal losses are
avoidable losses and are not an inherent part to the
production process.
75 FE MARCH 2017
FE MARCH 2017
76
Process 1 account
RM RM RM RM
Direct Material 70,000 9.00 630,000 Trans to Process 60,000 15.50 930,000
2
Direct Labour 203,000 Normal Loss 7,000 0 0
Direct Expenses 38,500 Abnormal Loss 3,000 15.50 46,500
Overhead 105,000
70,000 976,500 70,000 976,500

= RM976,000 – RM0
70,000 – 7,000
AL = INPUT – TRANS - NL
= RM15.50
= 70,000 – 60,000 – 7,000
= 3,000
FE MARCH 2017
77
Process 2 account
RM RM RM RM
OWIP 7,000 76,000 FG 60,000 1,206,990
Trans from 60,000 15.50 930,000 CWIP 12,000 223,320

Process 1
Direct Labour 186,480
Direct Expenses 29,600
Overhead 103,230
Abnormal Gain 5,000 105,000

72,000 1,430,310 72,000 1,430,310
AG = FG + CWIP – OWIP - TRANS

= 60,000 + 12,000 – 7,000 - 60,000 = 5,000
FE MARCH 2017
78
Input Output TFP1 Direct Direct Overheads

Labour Expenses
OWIP 7,000 OWIP 7,000 0 - 40 2,800 40 2,800 60 4,200
TF P1 60,000 CP 53,000 100 53,000 100 53,000 100 53,000 100 53,000
CWIP 12,000 100 12,000 70 8,400 70 8,400 30 3,600
AG [5,000] 100 [5,000] 100 [5,000] 100 [5,000] 100 [5,000]
67,000 67,000 60,000 59,200 59,200 55,800
CP = INPUT – OWIP – CWIP - AG

= 67,000 – 7,000 – 12,000 - 5,000 =
53,000
FE MARCH 2017
79 Cost TFP1 Direct Direct Overhead Total
RM Labour Expenses RM
RM RM
Total EQ units 60,000 59,200 59,200 55,800
Evaluation of:
Finished Goods
a. OWIP b/d 76,000
b. OWIP - 2,800 x 2,800 x RM0.50 4,200 x 17,990
RM3.15 =RM1,400 RM1.85
= RM8,820 = RM7,770
c. CP 53,000 x RM21.00 1,113,000
Total ?
AG 5,000 x RM21.00 105,000
CWIP 12,000 x RM15.50 8,400 x RM3.15 8,400 x RM0.50 3,600 x RM1.85 223,320
=RM186,000 =RM5,600 =RM4,200 = RM6.660
FE MARCH 2017
80
◻ The formula to estimate normal loss based on the following

estimation:
Percentage of input :
Estimated loss % x Quantity of materials
◻
Percentage of production :
Estimated loss % x (OWIP Quantity + Quantity of materials –
CWIP Quantity)
◻ The treatment for by-products.

By product value should not be included in the apportionment of
joint cost (to be deducted from production costs) due to the
insignificant value of by product √ as compared to joint product.
81 FE OCT 2016
FE OCT 2016
Cutting Department Process account
82

RM RM RM RM
Direct Material 4,500 40.00 180,000 Trans to 4,200 80.00 336,000
Assembly
Process
Direct Labour 81,000 Normal Loss 225 7.00 1,575
Direct 33,975 Abnormal Loss 75 80.00 6,000

Expenses
Overhead 48,600
4,500 343,575 4,500 343,575

= RM343,575 – RM1,575 AL = INPUT – TRANS - NL

4,500 - 225 = 4,500 – 4,200 - 225
= 75
= RM80.00
FE OCT 2016
Assembly Department Process account
83

RM RM RM RM
OWIP 800 132,240 FG 4,285 596,219
Trans from Cutting 4,200 80.00 336,000 CWIP 540 67,446

Process
Added Material 86,500 Normal Loss 223 15.00 3,345
Direct Labour 63,606
Overhead 42,280

5,048 667,010 5,048 667,010
PROD = OWIP + TRANS - CWIP AG = FG + CWIP – OWIP - TRANS

= 800 + 4.200 - 540 = 4,285 + 540 – 800 – 4,200
= 4,460 = 48
NL = 5% X 4,460 = 223
FE OCT 2016
84
Input Output Material Add Direct Overheads
Material Labour
OWIP 800 FG 4,285 100 4,285 100 4,285 100 4,285 100 4,285
Trans in 4,200 CWIP 540 100 540 100 540 70 378 70 378
NL 223 100 223 100 223 100 223 100 223
AG [48] 100 [48] 100 [48] 100 [48] 100 [48]
5,000 5,000 5,000 5,000 4,838 4,838

FE OCT 2016
85 Cost Material Add Direct Labour Overhead Total
RM Material RM RM
RM
Previous Cost + RM64,000 RM43,500 + RM18,640 + RM6,100 + RM
Current Cost +RM336,000 RM86,500 RM63,606 42,280
Total EQ units 5,000 5,000 4,838 4,838 RM133.00
= Cost per EQ unit = RM80.00 = RM26.00 = RM17.00 = RM10.00
Evaluation of:
Finished Goods
FG 4,285 X RM133.00 569,905
Net NL 223 x RM133.00 26,314
= NL Value – NL SV
= RM29,659 – RM3,345 =RM29,659
=RM26,314
Total ?
AG 48 x RM133.00 6,384
CWIP 540 x RM80.00 540 x RM26.00 378 x RM17.00 378 x RM10.00 67,446
=RM =RM =RM = RM
FE OCT 2016
86
◻ FOUR (4) characteristics of process costing:

i. Accumulation of costs to each process
ii. Products consist of like units, identical.
iii. Product cost is an average cost.
iv. Costs are computed for each process at the end of the
process.
◻ Difference between waste and spoiled work:
Waste - discarded substance having no value.
Spoiled work - output of a process which does not meet
quality standard.
87 FE MARCH 2016
FE MARCH 2016
88
Process 1 account
RM RM RM RM
Direct Material 16,000 2.50 40,000 Trans to Process 15,500 7.40 114,700
2
Direct Expenses 30,000
Overhead 3,120
Abnormal Gain 300 7.40 2,220
16,300 115,340 16,300 115,340

AG = TRANS + NL - INPUT
= RM113,120 – RM640 = 15,500 + 800 – 16,000
16,000 – 800 = 300
= RM7.40
FE MARCH 2016
Process 2 account
89
RM RM RM RM
OWIP 800 39,111 FG 15,000 195,081
Trans from 15,500 7.40 114,700 Normal Loss 632 1.00 632
Process 1
Direct Labour 20,800 CWIP 500 5,295
Overhead 20,800 Abnormal 168 2,103

Loss
16,300 203,111 16,300 203,111
PROD = OWIP + TRANS - FG - CWIP

AL = OWIP + TRANS – FG – NL - CWIP
= 800 + 15,00 – 15,000 - 500
= 800 + 15,500 – 15,000 – 632 - 500
= 15,800
= 168
NL = 4% X 15,800 = 632
FE MARCH 2016
90
Input Output Trans in Direct Labour Overheads

OWIP 800 FG 15,000 100 15,000 100 15,000 100 15,000
Trans in 15,500 CWIP 500 100 500 60 300 40 200
NL 632 100 632 100 632 100 632
AL 168 100 168 100 168 100 168
16,300 16,300 16,300 16,100 16,000

FE MARCH 2016
91
Cost Trans in Direct Labour Conversion C Total

RM RM RM RM
Previous Cost 24,991 + 6,920 + 7,200 +
+ Current Cost 114,700 28.500 20,800
= Total Cost Incurred 139,691 35.420 28,000
Total Cost Incurred RM139,691 RM35,420 RM28,000
Total EQ units 16,300 16,100 16,000
= Cost per EQ unit = RM8.57 = RM2.20 RM1.75 RM12.52
Evaluation of:
Finished Goods: 15,000 x RM12.52 187,800
Completed Unit
Net NL 632 x RM12.52 7,281
= RM7,913 – RM632
=RM7,281
Total ?
CWIP 500 x RM8.57 300 x RM2.20 200 X RM1.75 5,295
= RM4,285 = RM660 =RM 350
AL 168 x RM12.52 2,103
FE MARCH 2016
92 JOB COSTING PROCESS COSTING
1. Used in industries where many different Used in industries where the products are
jobs are produced at the end of the homogeneous (i.e. more or less
production. identical/uniform).
2. Many different jobs are worked on during Products are produced in a continuous
each period. Product is recognized by basis. Flow of units is more or less
job or batch. continuous.
3. Units of product are distinguishable. Units are indistinguishable as all units

produced are identical.
4. Costs are accumulated by individual job. Costs are accumulated by departments /

processes.
5. Use job cost sheet. Use department production report.
Abnormal loss
Abnormal losses are losses that are not inherent in the production. It
can be avoided and eliminated. These losses are not expected and
would not occur under efficient operating conditions.
93 FE SEPT 2015
FE SEPT 2015
94
RM RM RM RM

Colouring
Process
Add Material 20,000 77,150 Normal Loss 20,000 0
Direct Wages 107,850 Abnormal Loss 20,000 63,000
Prod Overhead 22,000
200,000 567,000 200,000 567,000

NL = 10% X INPUT
Cost per Unit = Total Input Cost – NL Scrap Value = 10% X 200,000
Expected Output Units = 20,000
= RM567,000 – RM0
AL = INPUT – TRANS – NL
200,000 – 20,000 = 200,000 – 160,000 – 20,000
= RM3.15 = 20,000
FE SEPT 2015
95
Colouring Process account
RM RM RM RM
OWIP 8,000 34,000 FG 120,000 797,750
Trans from 160,000 3.15 504,000 CWIP 35,000 171,500

Mixing Process
Add Material 80,000 NL 13,000 1.00 13,000
Conversion Cost 364,250
168,000 982,250 168,000 982,250

FE SEPT 2015
96
Input Output Material Add Material Conversion
Cost
OWIP 8,000 OWIP 8,000 0 - 0 - 40 3,200
Trans in 160,000 CP 112,000 100 112,000 100 112,000 100 112,000
CWIP 35,000 100 35,000 100 35,000 50 17,500
NL 13,000 100 13,000 100 13,000 100 13,000
168,000 168,000 160,000 160,000 145,700
CP = INPUT – OWIP – CWIP - NL

= 168,000 – 8,000 – 35,000 – 13,000
= 112,000
FE SEPT 2015
97 Cost Material Add Material Conversion Cost Total
RM RM RM RM
Total EQ units 160,000 160,000 145,700
Evaluation of:
Finished Goods
a. OWIP b/d 34,000
b. OWIP - - 3,200 x RM2.50 8,000
c. CP 112,000 x RM6.15 688,800
Net NL 13,000 x RM6.15 = RM79,950 66,950
= RM79,950 – RM13,000
= RM66,960
Total ?
CWIP 35,000 x RM6.15 35,000 x RM0.50 17,500 x RM2.50 171,500
=RM110,250 =RM17,500 =RM43,750
FE SEPT 2015
98
◻ Four (4) possible reasons of having losses:

Waste –material residue that has no value at all. They are uncontrollable
losses
Scrap –material residue or a left-over parts of raw materials usually
insignificant in quantity and has minor sales value.
Spoiled work – output of a process that failed to meet the quality standard. It
can be sold without further process.
Defective units- Similar to spoiled work but can be rectify to bring it back to
the quality standard desire.
◻ Distinguish methods of calculating OWIP values.

FIFO- it is assumed that OWIP is the first group of units to be processed and
completed during the current period
Average cost- One may assumed that OWIP is inextricably merged with the
unit produced in the current period and can no longer be identified
separately
99 FE MARCH 2015
FE MARCH 2015
Finishing Department Process account
100

RM RM RM RM
OWIP 500 2,500 FG 6,300 6.47 40,790
Trans from 5,950 29,450 CWIP 300 1,731

Assembly
Add Material 250 3,726 Abnormal 100 655
Loss
Conversion 7,500
Cost
6,700 43,176 6,700 43,176
AL = No expected loss [NL]
however rejected units is 100
= 100
= RM40,790 – RM0
FG = INPUT – CWIP - AL
6,300 = 6,700 – 300 - 100
= RM6.47 = 6,300
FE MARCH 2015
101
Input Output Trans in Material Conversion
Cost
OWIP 500 OWIP 500 0 - 20 100 40 200
Trans in 5,950 CP 5,800 100 5,800 100 5,800 100 5,800
Add 250 CWIP 300 100 300 70 210 50 150

Material
AL 100 100 100 100 100 100 100
6,700 6,700 6,200 6,210 6,250
CP = INPUT – OWIP – CWIP - AL

= 6,700 – 500 – 300 -100
= 5,800
FE MARCH 2015
102 Cost Trans in Material Conversion Cost Total
RM RM RM RM
Total EQ units 6,200 6,210 6,250
Evaluation of:
Finished Goods
a. OWIP b/d 2,500
b. OWIP - 60 240 300
c. CP 112,000 x RM6.55 37,990
Total ?
CWIP 300 x RM4.75 210 x RM0.60 150 x RM1.20 1,731
=RM =RM =RM
AL 100 x RM6.55 655
FE MARCH 2015
103
Abnormal Loss account

RM RM RM RM
Finishing 100 6.55 655 Cash 100 100
Process SOPL 555
100 655 100 655
FE MARCH 2015
104
Process Costing Job Costing

Products Similar product or Each job is different
batches of similar from one another.
products.
Production Process Products go through Each job may be
the same series of completed through
production process. different process.
Computation Cost of each product is Job cost is computed
of cost per unit the total unit cost from by tracking the
all process. production of each
order.
a. Two reasons for apportioning joints costs:
i. For profit determination
ii. For stock valuation

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1

MAF201 FINAL EXAM QUESTIONS – ANSWER KEY

◻ Final Exam Questions:

*** **** Figures from Workings below

Prod OH 116,250 Abnormal Loss 2,000**** 15.50** 31,000

75,000 1,057,500 75,000 1,057,500

Balanced Dr and Cr!

** Figures from Statement of Cost and Evaluation

Units CPU Total Units CPU Total

Abnormal Gain 4,476**** 129,804**

72,476 2,169,509 72,476 2,169,509

Balanced Dr and Cr!

Input Output Trans-in Direct Labour Prod OH

OWIP 2,500 OWIP 2,500 0 30% 750 50% 1,250

TF P1 65,500 CP 64,100 100 64,100 100 64,100 100 64,100

NL 4,676 100 4,676 100 4,676 100 4,676

AG (4,476) 100 (4,476) 100 (4,476) 100 (4,476)

CWIP 1,200 100 1,200 60% 720 40% 480

68,000 68,000 65,500 65,770 66,030

c. CP 64,100 x RM29.00 1,858,900

d. Net NL 4,676 x RM29.00 123,914

AG 4,476 x RM29.00 129,804

CWIP 1,200 x RM15.50 720 x RM7.50 480 x RM6.00 26,880

Joint Products By-products

*** Figures from Workings below

Direct labour 60,000* Normal Loss 1,170 2.00* 2,340

Prod OH 44,130* Abnormal Loss 230*** 13.00** 2,990

19,500 240,630 19,500 240,630

Balanced Dr and Cr!

** Figures from Statement of Cost and Evaluation

OWIP 600* 2,600* FG 15,910 237,020**

Trans from 18,100 235,300 Normal Loss 1,190*** 2.00* 2,380

Direct labour 14,416*

Abnormal Gain 100**** 1,400**

19,800 275,472 19,800 275,472

Input Output Trans-in Materials Direct Labour Prod OH

NL 1,190 100 1,190 100 1,190 100 1,190 100 1,190

AG (100) 100 (100) 100 (100) 100 (100) 100 (100)

19,700 19,700 19,700 19,160 18,620 18,080

Balanced Input & Output

d. Net NL 1,190 x RM14.00 14,280

AG 100 x RM14.00 1,400

CWIP 2,700 x RM12.00 2,160 X RM1.00 1,620 x RM0.80 1,080 x RM0.20 ?

Direct labour 70,750 Abnormal Loss 100 13.80 1,380

20,000 269,520 20,000 269,520

Cost per Unit = Total Input Cost – NL Scrap Value

Trans from 19,300 13.80 266,340 Normal Loss 760 3,040

Direct labour 86,310

Abnormal Gain 160 4,000

20,860 534,218 20,860 534,218

Input Output Trans-in Added Direct Labour Prod OH

NL 760 100 760 100 760 100 760 100 760

AG (160) 100 (160) 100 (160) 100 (160) 100 (160)

20,700 20,700 19,300 19,240 19,180 18,980

CP = INPUT – OWIP – NL + AG - CWIP

d. Net NL 760 x RM25.00 15,960

CWIP 1,700 x RM13.80 1,360 X RM2.70 1,020 x RM4.50 680 x RM4.50 ?

◻ 4 possible reasons of having Abnormal Loss:

Abnormal Gain 100 14.50 1,450

20,100 278,150 20,100 278,150

Cost per Unit = Total Input Cost – NL Scrap Value

= RM276,000 – RM1,200 NL = 5% x 20,000 = 1,000

Trans from 19,100 14.50 276,950 Normal Loss 980 1,960

* ** Figures from Workings below

Prod OH 116,250 Abnormal Loss 2,000** 15.50 31,000

Abnormal Gain 4,476** 129,804

Prod OH 44,130* Abnormal Loss 230* 13.00 2,990

Abnormal Gain 100** 1,400