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
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  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

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