Costing - process costing
This query is : Resolved
09 September 2012
while calculating "equivalant units" why dont we consider "normal loss" i.e we just put it as nil.
please help me asap
thank you
please help me asap
thank you
10 September 2012
Dear Srisha,
Normal loss in inherent in the production... so the cost of normal loss units is beared by good units thats y we just put NIL... as this loss has to be there.. Eg... we introduced 100 Kg of Raw material but we know that 10% has to be normal loss.. so in this case we already know thwt Final product will be 90 only.. so the cost of 10 normal loss units will be beared by 90 good units...
Normal loss in inherent in the production... so the cost of normal loss units is beared by good units thats y we just put NIL... as this loss has to be there.. Eg... we introduced 100 Kg of Raw material but we know that 10% has to be normal loss.. so in this case we already know thwt Final product will be 90 only.. so the cost of 10 normal loss units will be beared by 90 good units...
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11 September 2012
thank you so very much yaar...wasnt getting the logic only...thanks again :)
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