$($a$)$ Define the following terms used in process costing:

$($i$)$ Normal loss

$($ii$)$ Abnormal loss

$($iii$)$ Abnormal gain

$(6$ marks$)$

$($b$)$ Explain how each term is treated in the process accounts.

$(6$ marks$)$

$($c$)$ Explain the difference between a 'joint product' and a $\text{'}$by$-$product'.

$(4$ marks$)$

$($d$)$ List three methods that are commonly used to apportion joint processing costs.

$(3$ marks$)$

$($e$)$ A company produces two joint products. Alpha and Beta, from the same process.

Joint processing costs of N $$300,000$ are incurred up to split$-$off point, when $200,000$

units of Alpha and $100,000$ of Beta are produced. The selling prices at split$-$off point

are N$$2\mathrm{.}50$ per unit for Alpha and NS$4$ per unit for Bela.

The units of Alpha could be processed further to produce $120\mathrm{.}000$ units of a new

product. Delta, but at an extra fixed cost of N$$40\mathrm{.}000$ and variable cost of NSO$\mathrm{.}30$

per unit of output of Alpha. The selling price of Delta would be N $$6\mathrm{.}50$ per unit. It is

assumed that all units will be sold.

Required:

Calculate whether the company should sell either Alpha or Della.

$(6$ marks$)$