A process costing system for J Co used an input of 3,500Kg of materials at Rs20 per Kg and labour hours of 2,750 at Rs 25 per hour. Normal loss is 20% and losses can be sold at a scrap value of Rs5 per Kg. Output was 2,950 Kg. What is the value of the output?

The correct answer is: A. Rs 142,485

The value of the output is calculated as follows:

• Cost of materials used = 3,500 * 20 = Rs 70,000
• Cost of labour = 2,750 * 25 = Rs 68,750
• Cost of normal loss = 3,500 * 0.2 = Rs 700
• Value of normal loss = 700 * 5 = Rs 3,500
• Cost of units produced = 70,000 + 68,750 – 3,500 = Rs 142,485

Therefore, the value of the output is Rs 142,485.

Option A is the correct answer because it is the only option that is equal to the value of the output calculated as above. Option B is incorrect because it is the cost of materials used plus the cost of labour. Option C is incorrect because it is the cost of materials used plus the cost of labour plus the cost of normal loss. Option D is incorrect because it is the cost of materials used plus the cost of labour plus the cost of normal loss plus the value of normal loss.