XYZ plc, a paint manufacturer, operates a process costing system. The following details related to process 2 for the month of October: There are no further processing costs associated with either paint X or the by-product, but paint Y requires further processing at a cost of £1.50 per litre. All three products incur packaging costs of £0.50 per liters before they can be sold. Required: (a) Prepare the process 2 account for the month of October, apportioning the common costs between the joint products, based upon their values at the point of separation (b) Prepare the abnormal loss/gain account, showing clearly the amount to be transferred to the profit and loss account.
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