Final answer:
Calculating the company's cost per kg involves adjusting the total costs by the scrap value recovered and then dividing by the actual output. The value of abnormal gain or loss compares actual to expected loss. Process accounts will reflect these figures accordingly.
Step-by-step explanation:
The question involves calculating the cost per kg of Bento for a company based on different levels of output and accounting for normal loss and scrap value. Additionally, it requires calculating the value of abnormal gain or loss and preparing the process accounts to reflect these values.
To determine the cost per kg, we'll need to subtract the scrap value of losses from the total costs and then divide this adjusted total cost by the actual output. The value of the abnormal gain or loss is found by comparing the actual loss to the expected normal loss. Finally, the process accounts will be prepared to illustrate the costs accounting for any abnormal gain or loss.
Example calculation: If a company has total costs of $855,000, a normal loss of 10%, and an actual output of 46,500 kg, the scrap value of the lost Bento being $10.80 per kg, the cost per kg can be calculated. Assuming no abnormal losses or gains, the cost per kg can be found by accounting for the scrap value recovered from the normal loss.
Your complete question is: Question 2 b-(11 marks) A company had 50,000 kg of Bento into its production process. Normal loss is expected to be 10% of input and the costs associated with the process was $855,000 and there was no ending work-inprogress. The scrap value of losses is estimated to be $10.80 per kg. Calculate: a. The cost per kg. if output was (i) 46,500 kg. and (ii) 44,000 kg. (3 marks) b. The value of the abnormal gain/loss. (2 marks) c. Prepare the process accounts to reflect the abnormal gain/loss. (6 marks)