6. (a)
A food manufacturing company has a normal wastage as animal feed
at the rate of 5% per 100kg. in a given period, the following was recorded:
Input material 32,800kg at N10 per kg
Labour loverhead N579,200
(a) Assuming that loses were at a normal level, compute the cost
per kg.
(5 marks)
(b) Assume the same data as above, except that total production at the
end of the day was 30,000 kg. Compute the abnormal loss and show the
relevant accounts.
(10 marks)
(c) Assume the same data as (a) above, except that the actual loss is
1000kg. show the relevant accouts with regards to this loss.
(d) What do you understand by normal loss and abnormal loss with
examples?
(15 marks)