Which one of the following statements is false?
A) The number of units of normal losses is added to the units of input material on the credit side of the process account.
B) The cost of normal losses is rolled up into the cost of the units of expected output from a process.
C) Normal losses are valued as part of the output from a process.
D) Normal losses are expected losses and are allowed for in the budget for each process.

Question

Quizplus · Accepted Answer

Normal losses are expected as part of the production process and their cost is absorbed by the good units produced, not added to the input material. The statement in option A is false because in accounting for process costing, normal losses are not added to the units of input material on the credit side of the process account. Instead, the cost associated with normal losses is spread over the cost of the good output, effectively increasing the cost per unit of the good output.

Which One of the Following Statements Is False