Hard steel, product produced by Rock Industry Plc., passes through processes A and B before completion. In process B, a by-product Soft steel is produced which, after processing, in process C, is sold at a profit of 25% of selling price. The following data is given below: Process A B C Output in units 5,290 4,000 250 M Normal loss in process % of input 20 10 5 K K K Scrap value of any loss in process /unit 2.5` 8 - Direct material introduced (5,000 units) 50,000 -- - Direct materials added 10,000`` 3,100 250 Direct wages incurred @K3/hr. 12,000 15,900 550 Direct expenses 7,800 2,100 -- Production overheads for the month, K85, 000, is absorbed by Labour hour rate. 

Required; 

1. (A) Process A (B) Process B (C) Process C (d) Abnormal gain account 

2. Define and explain briefly, the accounting treatment of: (a) By-product (b) Joint product

Answer rating: 100% (QA)

1 a Process A The output from process A is 5290 units and the normal loss is 20 of the input which i... View the full answer