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7.2 Process Cost Analysis Without Incomplete Units

We are considering a situation wherein there is no incomplete unit in the process. This is for better understanding of the process situation. Read the process input-output position given in Figure: 7.2

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process cost structure

Every process normally loses some inputs. The standard loss of input is called normal loss. Normal loss is not costed. Only the normal output bear the process cost. However, the abnormal loss is also costed (see para7.2.1). Thus process-I lost 10,000 units input & produces 90,000 units @ $ 20 which was transferred to process-II. Process-II in turn lost 4500 units and produces 85,500 units @ $ 27 which was transferred to process-III. Finally, process-III lost 8,550 units and produces 76,950 units @ $ 35 per unit.

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