PROCESS COSTING

1. From the given information prepare Process Account showing cost per article in each of accounts. The number of article produced is 400.

Material Wages Direct Expenses

Process A Process B 4000 2000 2000 1600 1600 400

Process C 2000 800 400

Indirect Expenses amounted to Rs.1100 should be apportioned on the basis of wages.

Product X is obtained after it passes through three distinct processes. You are required to prepare process accounts from the following: Process 1 5200 4000 4000 Process 2 3960 6000 6000 Process 3 5924 8000 8000 Total

Materials Labour Overhead

15084 18000 18000

1000 units @ Rs.6 per unit were introduced to Process 1. Actual Output Units Normal Loss 5% 10% 15% Value of scrap per unit (Rs.) 4 8 10

Process 1 Process 2 Process 3

950 840 750

3.The product of a manufacturing concern passes through two processes 'A' & 'B' and then to finished stock. It is ascertained that in each process 5% of the total weight is lost and 10% is scrap which from processes A and B realizes Rs.70 per ton and Rs.180 per ton respectively. The following are the figures relating to both the processes. Material (in ton) Cost of material Rs. Per ton Wages Manufacturing Expenses Output in Ton Process A 800 100 20000 8000 660 Process B 80 200 10000 4000 639

Prepare process cost accounts showing cost per ton of each process. There was no stock in any process.

4. The product of a company passes through three distinct processes to completion. These processes are known as A, B and C. From past experience it is ascertained that wastage is incurred in each process as follows: Process A3%, B5% and C-8%. The wastage of each process has a scrap value. The wastage of Process A, B, C was sold at 25 paisa per unit, 50 paisa per unit and Rs.1 per unit respectively. 10000 units were issued to Process A at a cost of Rs.1 per unit. The other expenses
Process A Process B Process C Materials Labour Direct Expenses Actual Output 1000 5000 1050 9500 1500 8000 1188 9100 500 6500 2009 8100

Prepare the process account and also give the abnormal wastage and the abnormal gain accounts.

4. A product passes through three processes before it is completed. The output of each process is charged to next process at a price calculated to give a profit of 20% on transfer price (or 25% on cost price). The output of process III is also charged to finished stock account on similar basis. There was no work in progress at the beginning or end of the year and overheads have been ignored. Following data has been obtained at the end of March 31, 2011.
Process I Process II Process Finished III Stock Direct Material 3000 4000 5000 Direct Labour 5000 3000 4000 Stock on 31st march 2000 4000 5000 2000 Sales during the year 25000 Prepare Process account and finished stock account showing profit element in each stage.

6. A company manufactures and sells its chemicals produced by consecutives processes. The product of the processes is dealt with as follows: Process A Process B Process C Transferred to next process Transferred to warehouse 66.67% 33.33% 60% 40% nil 100%

In each process 4% of the total weight put in is lost and 6% is scrap which from processes A realizes Rs.3 per ton, from B Rs.5 per ton and from C Rs.6 per ton. The following particulars relate to March 2011. Raw Material Used Process A 1400 Tons @ Rs. 10 per ton Process B 160 Tons @ Rs. 16 per ton Process C 1260 Tons @ Rs. 7 per ton Manufacturing wages and expenses: Process A Rs.5152; Process B Rs.3140 and Process C Rs.2898. Prepare Process Account indicating the cost per ton of each product.Goods of warehouse are sold at 25% profit on cost. Prepare Warehouse account also.

7. The following details are available from the books of a factory in which two processes are employed: Process A Process B Materials 900 tons at Rs.60 per nil ton Wages Rs.40000 Rs.20000 Factory Overhead 40% of wages 30% of wages Wastage 100 tons 150 tons By products 160 tons sold at 200 tons sold at selling price plus cost plus 33.33% 20%

Prepare necessary Ledger Accounts.

8 . The product manufactured by the standard chemicals Ltd. passes through three processes I, II and III. The following cost have been incurred for the month of September,2011:

Details 1. Material Consumed 2. Direct Wages 3. Direct Expenses Total 4. Output 5. Finished Process Stock: (i) 1.9.11 (ii) 30.9.11 6. Stock valuation on 1.9.11 (Rs. Per unit)

Process I 40,000 22,500 20,500 83,000 units 3,900 600 500 24.5

Process II 7,500 10,000 2,250 19,750 units 3850 550 800 31

Process III 5,000 10,000 2,505 17,505 units 3200 800 Nil 37

7. Percentage of wastage 8. Net Realisable value of wastage per unit (in Rs.)

2
13.5

5
16.25

10
21

Four thousand units of materials were introduced in Process I at a cost of Rs. 20000. Stock are valued and transferred to subsequent process at weighted average cost. The percentage of wastage is computed on the number of units entering the process concerned. Prepare (a) Process Account (b) Process Stock Account (c) Normal wastage Accounts (d)

9. The product Z of Rohan Ltd. passes through two processes A & B. Following is the information relating to both the processes:

Particulars Material in tonnes

Cost Of Materials per tonne Direct Wages Production Overheads Output in tonnes Normal Wastage Normal Scrap Realizable value of Scrap/tonne Selling price per tonne

Process A
1000 Rs. 125 Rs.28,800 25% of direct wages 810 5% of input 10% of input Rs. 80 To yield profit @ 20% on sales

Process B
360 Rs.187.5 Rs.11,160 25% of direct wages 780 5% of input 10% of input Rs. 200 To yield profit @ 1/6 on sales

Two-third of process A stock is transferred to process B and the balance stock is sold. The entire balance of Process B stock is sold. You are required to prepare Process Account and Process Stock Account.

10. Product A yields by-products B and C. The joint expenses of manufacture are: Materials Rs.4500 Labour Rs.2500 Overhead Rs.1800 Subsequent expenses are as follows: Material Labour overhead Total Selling price Estimated profit on sales A 600 500 400 1500 6000 25% B 1500 700 300 2500 10000 30% C 700 500 300 1500 5000 20%

Prepare a statement showing the apportionment of the joint expenses of manufacture over the different products. Also prepare Process Account.