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QUESTION

R makes one product, which passes through a single process. Details of the process account for period 1 were as follows:

R makes one product, which passes through a single process. Details of the process account for period 1 were as follows:

                                  $

Material cost – 20,000 kg 26,000

Labour cost 12,000

Production overhead cost 5,700

Output 18,800 kg

Normal losses 5% of input

There was no work-in-progress at the beginning or end of the period. Process losses have no value.

The cost of the abnormal loss (to the nearest $) is

A. $437

B. $441

C. $460

D. $465

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