Hi Friends
can some tell me the treatment of rejection cost of a product in accounts..?
Also whether rejection cost is part of total cost of a specific product.?
Thanks
CA Neha Gupta
CMA Shilpa Shinde
(COST ACCOUNTANT)
(217 Points)
Replied 28 July 2011
Dear Neha,
1) Rejection of Manufactured Product When "NORMAL" is to be treated as part of Product Cost it self as Normal Loss.
2)When the same is Abnormal it may be transfered to Costing Profit and Loss A/c or Shown as reconcilition between Costing and Financial Accounts, as in FA it is expensed out as period cost.
CAclubindia
