hi
this is ANUJ
i would like to know , how the treatment of normal loss in process costing
i have given normal loss @ 10% and there is Opening WIP And As well as Closing WIP with abnormal loss too.
whether i calculate normal loss on total input ( unit introduce+ OPening WIP) or
calculate on expected output ( Unit Introduceed+ opening WIP - Closing WIP)
MY VIEW
Normal loss will be calculated only on the new units introduced unless otherwise specified.
Opening WIP will not be taken into consideration because normal loss on that would have already be taken into account when the account was closed previously.
Hence normal loss is calculated only on new units introduced. But in all the books it is calculated on (opening wip + units introduced)
EXPLAIN IT PLEASE..............
CAclubindia
