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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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