Accounting · Process Costing
'ChemCorp Ltd.' manufactures a single chemical product, 'Zelox', through three sequential and distinct production stages: Process I, Process II, and Process III. The output of Process I becomes the input of Process II, and so on. During Process II, a predictable and unavoidable loss of 5 percent of the input units occurs, which has a realizable salvage value. Which costing method is appropriate, and how should this loss be treated?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1Batch Costing; The cost of the loss is distributed over the remaining good units in Process II.
- 2Process Costing; The sale value of the Normal Loss is credited to the Process II Account.✓
- 3Unit Costing; The loss value is ignored as it is a single output product.
- 4Job Costing; The loss value is deducted from the direct materials cost of Process II.
Correct answer
Process Costing; The sale value of the Normal Loss is credited to the Process II Account.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Accounting?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Process Costing MCQs →Want more practice questions on Process Costing?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Accounting · Process Costing