Cost Accounting Process Costing____________________________________________________________

PROCESS COSTING Format of Process A/c Particulars To 9irect material To 9irect La"our To +ndirect material To 0t er :#penses To A"normal gain(B//) Total Total nit + Rs Particulars By Normal Loss By )nits transferred to ot er process By A"normal loss (B//) nit + Rs

Format of Abnormal loss Particulars To Process A/c Total Format of Abnormal gain a/c Particulars To Normal Loss a/c To costing P/L a/c Total nits Rs Particulars By Process a/c (names of different process) Total nits Rs nit Rs! Particulars By Sale of wasted units By costing P & L a/c Total nit Rs!

1) To find t e cost "er unit for !aluation of units to "e transferred to ne#t process and also for a"normal$ loss or gain% & Total process cost ' Sal!age !alue of normal spoilage Total units introduced ' Normal loss in units () To find abnormal loss (or) gain (all in units)% & )nits from pre!ious process * fres units introduced ' Normal loss ' )nits transferred to ne#t process (+f t e result is positi!e t en a"normal loss, +f negati!e t en a"normal gain) -) +n case of opening .+P and closing .+P are gi!en t en t ere are different met#o$s of %aluation of closing &IP% i) /+/0 1et od ii) L+/0 1et od iii) A!erage 1et od i!) .eig ted A!erage 1et od 2) 3arious statements to "e prepared w ile .+P is gi!en% i) Statement of e4ui!alent production ii) Statement of cost iii) Statement of apportionment of cost i!) Process cost a/c '( FIFO )et#o$* +n t ese met od total units transferred to ne#t process includes full opening stoc5 units and t e closing stoc5 includes t e units introduced during t e process, +n t is met od t e cost incurred during t e process is assumed as to "e used% a) /irst to complete t e units already in process ") T en to complete t e newly introduced units c) /or t e wor5 done to "ring closing in!entory to gi!en state of completion

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Cost Accounting Process Costing____________________________________________________________

,( -IFO )et#o$ & ;ost incurred in process is used for% a) /irst to complete newly introduced units ") T en to complete units already in process in t is met od closing stoc5 is di!ided into two% i) )nits w ic represent opening stoc5 "ut lie at t e end of t e period ii) Newly introduced units in closing stoc5, .( A%erage )et#o$* +n t is met od a) No distinction is made "etween opening stoc5 and newly introduced material, ") +n finding cost per unit$ cost incurred for opening stoc5 is also to "e added wit current cost, (This addition is not done in LIFO & FIFO method as cost incurred in that process is only taken) /( &eig#te$ a%erage met#o$* T is met od is only used w en !aried product in processed t roug a single process, <eneral procedure is adopted ere, a) Statement of weig ted a!erage production s ould "e prepared, )nder t is statement output of eac products is e#pressed in terms of points, ") ;ost of eac type of product is computed on "asis of Points, Points of !ital importance in case of A"normal <ain / Loss% a) ;alculate cost per unit "y assuming t ere is no a"normal loss / gain ") ;ost per unit arri!ed a"o!e s ould "e applied for !aluation of "ot a"normal Loss/gain units and output of t e process, c) Separate a/c for "ot a"normal loss/gain is to "e prepared,

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