Pcr Accounting For Losses
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zoeeileen
Registered Posts: 19 New contributor 🐸
HI hope someone can answer something for me, i have just completed exam December 05, and on task 1.5, it seems to work out the maximum extra production different from what i am used to.
The way that i would work it out is amount needed 2000*100/96 as 4% is faulty.
The way they have worked it out is simply * by a %, can someone please confirm this.
Thankyou all for your help.
Zoe
The way that i would work it out is amount needed 2000*100/96 as 4% is faulty.
The way they have worked it out is simply * by a %, can someone please confirm this.
Thankyou all for your help.
Zoe
0
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Zoe
When you know how much material is available you can work out how many units can be made by multiplying by the % that is not lost through wastage
 dividing by the amount needed per unit
Sandy
sandy@sandyhood.com
www.sandyhood.com0 
I was tutor at a recent PCR Revision Day in London.
During the day I was concerned about some students and their understanding about wastage.
With just over a week before the exam I hope this helps candidates to identify when wastage takes place so that they can then see how the accounting for wastage should follow it.
Example Apple Pies UK Ltd make apple pies
The apples are delivered by the suppliers
They go into stores
They are issued to production where They are peeled and cored
 and turned into pulp
 before beting put into pies
 and baked
The remainder
then go to finished goods
And are sold
In a typical PCR question we work backwards The forecast sales are stated
 we find how much to produce by adding the closing stock (FG)
 subtracting the opening stock
 to find the number of nondamaged pies we need in stock (good production)
 we then divide by the good proportion of total production
 to find how many need to be made
Materials  The material needed to make the pies (apple pulp) is the amount for 1 pie x total production
But we must recognise that the production process converts apples into this pulp so we gross up to find the total weight of apples (inc peel and core) needed  divide by the proportion of apple that becomes pulp
 This gives us the total weight of apples needed
 Add closing stock of apples
 Subtract opening stock of apples
 To find the weight of apples that needs to be purchased
multiply by the cost per kg to find the cost of apple purchases
I hope this is a helpSandy
sandy@sandyhood.com
www.sandyhood.com0 
Thankyou both for your help Zoe:001_smile:0
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