shilpi (student) (780 Points)
13 May 20211)Debit Normal loss from Spoilage /waste/defective
Credit Process /Job /contract
(normal loss charged directly to production cost )
2)If charged indirectly to production cost
Debit Production overhead account
Credit stores ledger
which one is correct?
shilpi
(student)
(780 Points)
Replied 13 May 2021
manufactuing cost of work order is Rs 1000,8% of the production against that the order spoiled and rejection is estimated to have a realisable value of Rs 20 only .The normal rate of spoilage is 2% ..Record this entry in cost books
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 13 May 2021
Normal spoilage @ 2% is part of production cost.
Rest 6% abnormal loss is debited to P&L (net of realizable value)
CAclubindia
