Norman has a factory that operates a production process called finishing. The normal loss of the finishing process is 7%. Scrapped units out of the process sell for £4.50 per unit. Output from the process is transferred to the inventory ready for sale. Relevant information about costs is as follows.     Description   Units Amounts in £ Input materials   20500 70000 Transferred to Finished Inventory 17000   Labour and overheads   35000 Normal Loss 7%     Scrap Unit £4.50       A). What amount of cash will increase due to the sale of scrap? Choose one from the following:   A. £6,457.50   B. £15,750.00   C. £9,292.50   D. £10,673.50

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
  1. Norman has a factory that operates a production process called finishing. The normal loss of the finishing process is 7%. Scrapped units out of the process sell for £4.50 per unit. Output from the process is transferred to the inventory ready for sale.

    Relevant information about costs is as follows.

     

     

    Description

     

    Units

    Amounts in £

    Input materials

     

    20500

    70000

    Transferred to Finished Inventory

    17000

     

    Labour and overheads

     

    35000

    Normal Loss

    7%

       

    Scrap Unit

    £4.50

       

     

    A). What amount of cash will increase due to the sale of scrap?

    Choose one from the following:

      A.

    £6,457.50

      B.

    £15,750.00

      C.

    £9,292.50

      D.

    £10,673.50

Expert Solution
steps

Step by step

Solved in 3 steps with 4 images

Blurred answer
Knowledge Booster
Costing for Spoilage, rework and scrap
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education