Question 1

A synthetic meat laboratory uses process costing. During the month, 5,000 kg of material were input into the process. Normal loss is estimated at 10% of input. Actual output transferred to finished goods was 4,200 kg.

What is the abnormal loss or abnormal gain in kg?

Accepted Answer

Calculate expected output (Input - Normal Loss). Compare expected output to actual output. If actual is less, it's an abnormal loss.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Confusing total loss with abnormal loss, or mixing up abnormal loss with abnormal gain.

A synthetic meat laboratory uses process costing. During the month, 5,000 kg of material were input into the process. Normal loss is estimated at 10% of input. Actual output transferred to finished goods was 4,200 kg.

What is the abnormal loss or abnormal gain in kg?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 1

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