Explain with example inter process profit.
Answers
Answer:
1: a product passes through two processes A and B. Output of A is transferred to B at costs plus 25% profit and from B to finished stock at cost plus 25% profit.
Answer:
The correct answer to this question is a result, "inter-process profit" is a profit that is displayed in each process account.
Explanation:
Given - inter-process profit.
To Find - Explain with example inter-process profit.
The market price cannot be established, the transfer price is established by multiplying the processing cost by a portion of the profit margin. As a result, "inter-process profit" is a profit that is displayed in each process account.
Most manufacturing is done in stages or sequential processes, where the output of one process serves as the input for the next. For instance, in the steel business, iron ore is processed to produce billets or sponge iron, which are subsequently shaped to fit precise specifications.
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