Angolan Products

Angolan Products

Discussion Question
Angolan Products processes its products through three separate stages. Details of production for the month ending 31 May were as follows:
Process
Raw Materials
Direct
Production
Normal
Actual
 Labour
Overheads
Loss
Output
Primary
65,000 kg   $0.60/kg
$5,730
$3,240
10%
55,000
Secondary
 
$7,200
$4,100
5%
53,000
Finishing
 
$11,280
$9,655
5%
48,000
During the month $6,300 worth of materials were used in the secondary process. The nature of the process requires equipment to be cleaned at the end of each month; hence there is no opening or closing stock of product in process.

Losses from the finishing process are sold at $1.50 per kg.

Required:
i)                  The process account for each process: and
ii)               The abnormal loss/gain account(s).
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