Process Costing Problem

8/6/2019 Process Costing Problem

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Process X Process Y Process Z

Materials 2,250 750 300

Labour 1,200 3,000 900

Direct Expenses:Fuel 300 200 400

Carriage 500 300 100

Works Overhead 1,890 3,300 2,100



To Materials

To Labour

To Direct Expenses:

Fuel

Carriage

To works overhead

2,250

1,200

300

500

1,890

-------

6,140

-------

By Transfer to Process Y 6,140

-------

6,140

-------



To Tr. From Process X

To Materials

To labour

To Direct Expenses:

Fuel

CarriageTo works overhead

6,140

750

3,000

200

5003330

-------

13,720

-------

By Tr. To process Z 13,720

-------

13,720

-------



To Tr. From Process Y

To Material

To Labour

To Direct Expenses:

Fuel

CarriageTo Works Overhead

13,720

300

900

400

1002,100

-------

17,520

-------

By Transfer to Finished

Goods

17,520

-------

17,520

-------



` Materials 1000k.g.@Rs. 6 perkg.

` Labour Rs. 5,000

` Direct expenses Rs. 1,000

` Indirect Expenses allocated to Process A Rs.1,000 and Normal loss 100 kg.

Prepare Process A Account when:

(i) Scrap value of normal loss is nil

(ii) Scrap arising out of normal has a sale value of

Re. 1 per unit.



Particulars Kg. Amt Particulars Kg. Amt

To Materials

To Labour

To Direct Exp.

To Indirect Exp.

1,000

------

1,000

------

6,000

5,000

1,000

1,000

------

13,000

------

By Normal Loss

By Transfer to

Process B

100

900

-----

1,000

-----

100

12,900

-------

13,000

-------



Items Total Process I Process II Process

III

Direct Material

Direct Wages

Production Overhead

7,542

9,000

9,000

2,600

2,000

1,980

3,000

2,962

4,000

1,000 units @ Rs. 3 each were introduced to Process I. There was no stock of

material or work-in-progress at the beginning or at the end of the period. The

output of each process passes direct to the next process and finally to finished

stock. Production overhead is recovered on 100% of direct wages. The

following data are obtained.



Process Output during the

week

% of normal loss

to input

Value of scrap

per unit

I

II

III

950

840

750

5%

10%

15%

2

4

5

Prepare process cost accounts and abnormal gain or loss accounts.



Particulars Units Rs. Particulars Units Rs.

To Direct Mat.

To Direct Wages

To Prod. O.h

(100% of direct

wages)To Units

introduced

1,000

------

1,000

------

2,600

2,000

2,000

3,000

------

9,600

------

By Normal Loss

By Process II

50

950

-------

1,000

-------

100

9,500

------

9,600

------




To Process I

Transfer

To Direct Mat.

To Direct Wage

To Prod O.h.

950

-------

950

9,500

1,980

3,000

3,000

------

17,480

By Normal loss

By Abnormal

Loss

By Process III

95

15

840

-------

950

380

300

16,800

------

17,480

N ote:

Abnormal Loss: Rs. 17,480 ± Rs. 380 / 950-95 * 15 units

Rs. 300 (Rs. 20 p/u)




To Process II

To Direct Mat

To Direct Wag

To Prod O.h

To Abnormal gain

840

36

-------

876

16,800

2,962

4,000

4,000

1,368

------

29,130

By Normal loss

By Finished stock

126

750

-------

876

630

28,500

------

29,130

Note:

Abnormal Gain: Rs. 27,762 ± Rs. 630 / 840 ± 126 units * 36 units

Rs. 1,368




To Process II 15

-------

15

300

------

300

By Sale of Scrap

@ Rs. 4 Per Unit

By Costing P& L

A/c

15

--------

15

60

240

-----

300

Process Costing Problem

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