CAT / FIA FMA Syllabus C. Cost Accounting Techniques - Cost per unit of process outputs - Notes ^{7 / 17}

The following steps should be followed when answering questions which include normal loss, abnormal loss or abnormal gain

1. Draw the process account, and enter the inputs, i.e. units and values.

2. Enter the normal loss – units and scrap value if any.

3. Enter the good output – units only.

4. Balance the units. The balancing figure is either abnormal loss or gain.

5. Calculate the average cost per unit

   Average cost per unit = 

   Total cost of inputs – Scrap value of normal loss
   ---------------------------------------------------------
   Units input – Normal loss

6. Value the good output and abnormal loss or gain at this average cost per unit.