Process costing

The cases given below are from standard materials on this subject

Problem 1:Compute the equivalent units for the month of May from the following details relating to manufacture of a product.Opening inventory of work in progress 300 unitsStage of completionMaterial 30%Labour 40%Overheads 50%Number of units put into the process 10,000 unitsTransferred to the next process 9,600Closing inventory of work in progress 700 unitsStages of completionMaterial 80%Labour 75%Overheads 60%(Pg 564, cost accounting, shukla grewal and gupta)

Problem 2:The product manufactured by a light engineering factory undergoes two operations. The following data are available relating to expenses incurred on production during November.Machiningfinishing

Units as input90,00060,000

Expenses incurred in process:

Direct material2,70,000Nil

Direct labor1,28,00045,000

overheads64,0001,35,000

At the end of the month there were 30,000 units lying incomplete in machining operation. While the full quantity of materials had been consumed for the total production, the expenditure on labor and overheads was estimated to be 66.66% in respect of the incomplete products. You are required to prepare process accounts showing competed units of manufacturing operations being transferred to finishing operation.Pg 2.241, cost accounting ravi kishore

Problem 3:X ltd a manufacturer of a specialized product, is having a process costing system. The stock of work in progress at the end of each month is valued on FIFO basis. At the beginning of a month, the stock of work in progress was 400 units (40% complete) which was valued as follows:Materials 3,600Labour 3,400Overheads Rs 1,000During the month, actual issue of materials for production purpose was Rs 68,500. Wages and overheads in the month amounted to Rs 79,800 and Rs 21,280 respectively. Finished production taken into the stock in the month was Rs 2,500 units. There was no loss in the process. At the end of the month, the stock of work in progress was 500 units (60% complete) as to labour and overheads and 80% complete as to materials.(2.242, ravi kishore)

Question 4A company manufactures a product which involves two consecutive processes, viz. Pressing and Polishing. For the month of October, 2014, the following information is available: PressingPolishing

Opening Stock

Input of units in process1,2001,000

Units completed1,000500

Units under process200500

Materials Cost Rs., 96,000Rs. 8,000

Conversion CostRs. 3,36,000Rs. 54,000

For incomplete units in process, charge materials cost at 100 percent and conversion cost at 60 percent in the Pressing Process and 50 percent in Polishing Process. Prepare a statement of cost and calculate the selling price per unit which will result in 25 percent profit on sale price.Problem 5:

ABC Ltd process its products in three process ie., I, II and III. Process II receives units from Process I and after carrying out work on the unit transfers them to process III. For the month ending 31st March 2012, the relevant data were as follows:Opening WIP 2,000 units (25% complete) valued at Rs 25,0008,000 units received from process I valued at Rs 43,0008,400 units transferred to process III.Closing WIP 1,600 units (50% compete)The costs of the period was Rs 1,65,800 and no units were scrapped. Prepare process II account usinga) FIFOb) Weighted average cost method