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QUESTION 3 (25 MARKS) Olympic Company operates a processing operation involving two stages, the output...

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QUESTION 3 (25 MARKS) Olympic Company operates a processing operation involving two stages, the output of process 1 being passed to process 2. The process costs for the month of April 2021 were as follows: Process 1 Material Labor 2,000 kg at RM4.05 per kg RM4,000 Process 2 Material 1,250 kg at RM1.52 per kg Labor RM10,000 Production overhead is absorbed into process costs at a rate of 150% of direct labor costs in process 1 and 120% of direct labor costs in process 2. The normal loss in each process is 10% of input and scrapped units sell for RM0.50 each from process 1 and RM3 each from process 2. The output during the month of April 2021 was as follows: Process 1 1,750 kg Process 2 2,800 kg There was no inventory of work in progress at either the beginning or the end of the period and it may be assumed that all available waste matter had been sold at the prices indicated. Required: List THREE (3) examples of continuous production in the process costing. (3 MARKS) b. Differentiate between the normal loss and the abnormal loss. (4 MARKS) Prepare the following process accounts by showing the scrap, abnormal loss or gain: a. c. i. Process 1 (8.5 MARKS) (9.5 MARKS) ii. Process 2

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