When the abnormal has a scrape value the net cost of abnormal loss (cost of abnormal loss minus its scrap value) is then transferred as a cost to the cost accounting income statement at the end of the accounting period.

Related MCQs

• The disposal cost of abnormal loss is included in the abnormal loss account and therefore in the transfer of the cost of abnormal loss to the statement of profit or loss.
• If normal loss has a scrap value the company is able to recover some of the input costs to the process. The scrap value reduces the cost of the process.
• If the normal loss has no scrap value it is given a nil value.
• It is possible to have abnormal loss and abnormal gain on the same process account in the same period.
• The cost of units of abnormal loss is treated as an _________ for the period, and charged as an ___________for the period
• The difference between total actual loss and normal loss is abnormal loss.
• The over-absorbed overhead is accounted for as an adjustment to the profit in the period, and is added to profit in the cost accounting income statement.
• If it is assumed that all losses in process occur at the end of the process, units of abnormal loss are costed in exactly the same way in the as units of finished output.
• Where process scrap is recycled for use in conjunction with new material as well as being so externally, which of. the following is most likely to be the value at which is debited to the process?
• The cost of abnormal loss is built into inventory.