QUESTION 2 A company using process costing manufactures a single product which passes through two processes, the output of process 1 becoming the input to process 2. Normal losses and abnormal losses are defective units having a scrap value and cash is received at the end of the period for all such units. The following information relates to the month of February, 2021; Raw materials issued to process 1 was 3,000kg at a cost of GH5 per unit. There was no opening or closing work-in-progress but opening and closing inventory of finished goods were GH20,000 and GH23,000 respectively. Process 1 Process 2 Normal loss as a percentage of input 10% 5% Output in kg 2,800 2,600 Scrap value per kg GH2 GH5 Additional components GH1,000 GH780 Direct wages incurred GH4,000 GH6,000 Direct expenses incurred GH10,000 GH14,000 Production overhead as a percentage of direct wages 75% 125% You are required to present accounts for: (i) Process 1 and Process 2 (ii) Finished goods (iii) Normal loss (iv) Abnormal loss and / or abnormal gain