Q1. A chemical product passes through two
different processes to completion. During the month ending on 31st
December, 2008, 5,000 units of materials valued at Rs 5 per unit were put into
production. The other relevant information is as under:
|
Particulars
|
Process A
|
Process
B
|
|
Sundry Material
|
Rs 2,500
|
Rs 9,000
|
Labour
|
Rs 17,500
|
Rs 9,500
|
|
Direct Expenses
|
Rs 500
|
Rs 500
|
|
Cost of Containers
|
|
Rs 10,000
|
Normal Wastages
|
10%
|
2.50%
|
|
Actual Output
|
4,000 units
|
4,000 units
|
|
Sale value of wastage per unit
|
Re 1
|
Rs 10
|
Prepare process cost accounts to show:
i.
Total
cost of production
ii.
Cost
per unit at each stage
Q.2 The product of a company passes
through three distinct processes called A, B and C. From the past experience,
it is ascertained that wastage is incurred in each as under:
Process A – 2%, Process B – 5%, Process C – 10%
The percentage of wastage is computed on the number of
units entering process concerned. The wastage of each process possesses a scrap
value. The wastage of Process A and B is sold at Rs 5 per 100 units and that of
Process C at Re 0.20 per unit.
The following information was obtained
for the month of March, 2009.
20,000 units of crude material were introduced in Process
A at a cost of Rs 8,000.
|
|
Process A
|
Process
B
|
Process
C
|
Particulars
|
Rupees
|
Rupees
|
Rupees
|
|
Material Consumed
|
4,000
|
1,500
|
1,000
|
Direct Labour
|
6,000
|
4,000
|
3,000
|
|
Manufacturing Expenses
|
640
|
225
|
2,405
|
|
|
Units
|
Units
|
|
Output in units
|
19,500
|
19,250
|
15,900
|
Finished Product Stock:
|
|
|
|
|
On March 1, 2009
|
2,000
|
3,000
|
5,000
|
|
On March 31, 2009
|
1,500
|
4,000
|
?
|
Stock valuation on 1st March, 2009 per unit Re
1, Rs 1.50, Rs 1.80. Stocks on 31st March are to be valued as per
valuation as on 1st March, 2009. Draw Process accounts A, B C and
Process Stock Accounts of A, B and C.
Q3. The product of a Company passes
through two process called I and II. From the past experience the percentage of
wastage which is computed on the number of units entering process concerned is
ascertained as under:
Process I – 2%, Process II – 5%
The wastage of each process possesses a scrap value. The
wastage of Process I is sold at Rs 10 per 100 units and Process II at Rs 20 per
100 units.
The following information is available
for the year ended December 2008.
40,000 units of crude material were introduced in Process
I at a cost of Rs 16,000.
|
|
Process I
|
Process
II
|
Particulars
|
Rupees
|
Rupees
|
|
Material Consumed
|
8,000
|
2,800
|
Direct Labour
|
12,200
|
14,000
|
|
Manufacturing Expenses
|
3,080
|
1,000
|
|
|
Units
|
Units
|
Finished Products:
|
39,000
|
38,500
|
Stock:
|
|
|
|
On January 1
|
4,000
|
6,000
|
|
On January 31
|
3,000
|
8,000
|
|
Stock valuation January 1 (per unit)
|
Rs 0.90
|
Rs 1.47
|
Stock at 31st December, is to be at the cost
as shown by the years process accounts. Prepare necessary accounts.
Q4. Product ‘P’ passes through three process
to completion. Following are the relevant details:
|
|
|
PROCESS
|
||
|
|
Total
|
No. 1
|
No. 2
|
No.3
|
Particulars
|
Rupees
|
Rupees
|
Rupees
|
Rupees
|
|
Direct Material
|
8,482
|
2,000
|
3,020
|
3,462
|
|
Direct Labour
|
12,000
|
3,000
|
4,000
|
5,000
|
|
Direct Expenses
|
726
|
500
|
226
|
Nil
|
|
Production Overheads
|
6,000
|
1,500
|
2,000
|
2,500
|
Ø 1,000 units at Rs 5 each
were issued to Process No. 1. Output of each process was:
Process No. 1 – 920 units, Process No. 2 – 870 units, Process
No. 3 – 800 units
Ø Normal loss per process was
estimated as:
Process No. 1 – 10% of units introduced,
Process No. 2 – 5% of units introduced,
Process No. 3 – 10% of units introduced
Ø The loss in each process
represented scrap, which could be sold to a merchant at value as follows:
Process No. 1 – Rs 3 per unit, Process No. 2 – Rs 5 per unit, Process
No. 3 – Rs 6 per unit
Ø There was no stock of
materials or work-in-progress in any department at the beginning or end of the
period. The output of each process passes directly to the next processes and
finally to finished stock. Production overheads allocated to each process on
the basis of 50% of the cost of direct labour.
Prepare Process Accounts, Normal and Abnormal Loss &
Abnormal Gain Account.
Q5. Product X is obtained after it passes
through three distinct processes. You are required to prepare Process Accounts
from the following information:
|
|
Process I
|
Process
II
|
Process
III
|
Particulars
|
Rupees
|
Rupees
|
Rupees
|
|
Material
|
5,200
|
3,960
|
5,924
|
Direct Wages
|
4,000
|
6,000
|
8,000
|
Production overheads are 100% of Direct Wages. 1,000
units were introduced in Process I @ Rs 6 per unit. Actual output in units,
Normal Loss and Value of scrap per unit is as under:
Particulars
|
Output
|
Loss
|
Scrap
Value per unit
|
Process I
|
950
|
5%
|
4
|
|
Process II
|
840
|
10%
|
8
|
Process III
|
750
|
15%
|
10
|
Q6. The product of a company passes
through three distinct processes to completion. These processes are known as A,
B and C.
From the past experience it is ascertained that loss
incurred in each process is as under:
Process A – 2%, Process
B – 5%, Process C – 10%
Scrap value of loss of each process was Rs 5 per 100
units of A and B & Re 0.20 per unit for C.
The output of each process passes immediately to the next
process and form process C to finished stock.
The following information is available.
|
|
Process A
|
Process
B
|
Process
C
|
Particulars
|
Rupees
|
Rupees
|
Rupees
|
|
Material Consumed
|
6,000
|
4,000
|
2,000
|
Direct Labour
|
8,000
|
6,000
|
3,000
|
Manufacturing Expenses
|
1,000
|
1,000
|
1,000
|
20,000 units have been issued to Process A at cost of Rs
10,000 and output of each process was:
Process No. A – 19,500 units, Process No. B – 18,000 units, Process
No. C – 16,000 units
No work-n-progress was there in any process.
Prepare Process Accounts, Normal Loss and Abnormal Loss
Account.
Calculations to be made to the nearest rupee.
Q7. The product of manufacturing unit
passes through two distinct processes. From past experience the incidence of
wastage is ascertained as under:
Process A - 2%, Process B - 10%
In each case the percentage of wastage is computed on the
number of units entering the process concerned. The sales realisation of
wastages in Process A and B are Rs 25 per 100 units and Rs 50 per 100 units
respectively.
The following information
is obtained for the month of April, 2009: 40,000 units of crude material were
introduced in Process A at a cost of Rs 16,000.
|
|
Process A
|
Process
B
|
Particulars
|
Rupees
|
Rupees
|
|
Other Material
|
16,000
|
5,000
|
Direct Labour
|
9,000
|
8,000
|
|
Direct Expenses
|
8,200
|
1,500
|
|
|
Units
|
Units
|
Output
|
39,000
|
36,500
|
Finished Product Stock:
|
|
|
|
On April 1
|
6,000
|
5,000
|
|
On April 30
|
5,000
|
8,000
|
|
Value of Stock per unit on April 1st
|
Rs 1.20
|
Rs 1.60
|
Stocks are valued and transferred to subsequent process
at weighted average cost. Prepare respective Process Accounts and Stock
Accounts.
Q8. A product passes through two distinct
processes. The product of the First Process less wastage and by-product becomes
the raw material for the second process. All by-products are sold directly from
the factory. The following information is obtained from the factory records.
|
|
First Process
|
Second
Process
|
Raw Materials
|
1,000 tonnes at Rs 30 per ton
|
|
Wages
|
Rs 25,000
|
Rs 20,000
|
|
Direct Charges
|
Rs 4,200
|
Rs 3,030
|
|
Factory Overheads
|
80% of Wages
|
75% of Wages
|
|
Wastage
|
10 tonnes
|
15 tonnes
|
Sale of By-product
|
90 tonnes at Rs 20 per
ton
|
85 tons at Rs 20 per ton
|
Give ledger accounts for the First Process and Second
Process showing in each process the cost per unit.
Q9. A factory manufactures a commodity,
which passes through three processes A, B and C. The finished product of
Process A becomes the raw material of Process B and the finished product of
Process B forms the raw material of Process C which delivers the end product.
The by-products of Process A and B are sold directly from the factory.
|
|
PROCESS
|
||
|
Particulars
|
A (Rs)
|
B (Rs)
|
C (Rs)
|
|
Materials
|
1,000 tonnes at Rs 12 per ton
|
700
|
600
|
|
Wages
|
Rs 10,000
|
20,000
|
36,000
|
|
Factory Overheads (% of Wages)
|
75%
|
60%
|
50%
|
|
Wastage (of no sale value)
|
2 tons
|
3 tons
|
2 tons
|
|
Sale proceeds of by-product produced
|
8 tons @ Rs 30 per ton
|
5 tons @ Rs 24 per ton
|
Nil
|
Draw up process accounts and by-product recoveries
accounts assuming that by-products are valued at estimated market price of Rs
25 per ton for Process A and Rs 20 per ton for Process B at the point of above
separation.
Q10. M/s Uday Workshop is producing a
product, which passes through two different processes. The by-product results
out of the process and all of them are sold directly from workshop. From the
following particulars give ledger accounts of two processes.
Particulars
|
Process I
|
Process
II
|
|
Raw Materials (1,000 tons)
|
15,000
|
|
|
Wages
|
12,500
|
11,280
|
|
Production Overheads
|
40% of Prime Cost
|
50% of Wages
|
|
Wastage
|
10 tons
|
20 tons
|
|
Sales of By-product
|
50 tons at cost plus 10%
|
30 tons at cost plus 20%
|
Q11. The following information has been obtained
from the books of a chemical Manufacturer. The product passes through two
processes before completion.
Particulars
|
Process I
|
Process
II
|
|
Materials
|
20,000 Kgs @ Re 1 /kg
|
|
|
Wages
|
Rs 5,000
|
Rs 6,000
|
|
Factory Overheads as a % of wages
|
80%
|
70%
|
|
Normal Wastage (no sale value)
|
400 Kgs
|
300 Kgs
|
|
Sale price of By-product
|
Re 1 per kg
|
Rs 2 per Kg
|
By-products
|
2,000 Kgs
|
1,200 Kgs
|
Show the cost of production (total and per unit) of the
final product for the two processes and also ascertain the profit (total and per
unit) with the help of the following additional data:
Sales Price Rs
3 per Kg
Selling & Distribution Overheads Rs 3,000
Units Sold 15,000
Kgs
Q12. A firm has three processing stages
viz. A, B and C. However, some of the goods can be sold immediately after the
process A. Similarly, some can be sold after the 2nd process viz. B.
You are required to prepare Process Accounts with the following information.
Also calculate cost per quintal in each process.
Particulars
|
Process A
|
Process
B
|
Process
C
|
Raw Material Used (Quantity)
|
200 quintals
|
104 quintals
|
84 quintals
|
|
Total cot of raw material (Rupees)
|
19,200
|
9,400
|
3,000
|
Direct Wages (Rupees)
|
5,760
|
7,600
|
5,000
|
|
Direct Expenses
|
3,840
|
3,800
|
2,200
|
|
Overheads Rs 18,360 to be charged
100% of direct wages
|
|
|
|
Loss due to processing
|
4%
|
5%
|
5%
|
|
Proportion of output transferred to
next process
|
50%
|
40%
|
|
|
Finished Stock Account
|
50%
|
60%
|
100%
|
Q13. Fertilisers Ltd. manufacturers &
sells three brands of fertilisers. The necessary details are:
Particulars
|
Process A
|
Process
B
|
Process
C
|
Raw Materials : Tons
|
200
|
71
|
264
|
|
Cost per ton
|
100
|
300
|
250
|
Direct Wages (Rupees)
|
8,000
|
3,490
|
2,850
|
|
Direct Expenses
|
2,520
|
2,400
|
3,820
|
|
Finished Product sold
|
25%
|
50%
|
100%
|
Finished Product transferred to
next process
|
75%
|
50%
|
|
|
Sale of scrap per ton (Rupees)
|
80
|
100
|
120
|
In each process 6% of the total weight is lost and 8% is
scrap. All sales are made to show a gross profit of 20% on process cost.
Prepare Process Cost Accounts.
Q14. Edible Oils Ltd. is a manufacturing
concern. Their product passes through three processes viz Crushing, Refining
and Finishing. Following figures were taken from their books for the month of
March, 2009.
|
|
Crushing
|
Refining
|
Finishing
|
Particulars
|
Rupees
|
Rupees
|
Rupees
|
|
Wages
|
10,000
|
4,000
|
6,000
|
Power
|
2,400
|
1,440
|
970
|
|
Steam
|
2,400
|
1,800
|
1,800
|
|
Other Material
|
400
|
8,000
|
|
Plant Repairs
|
1,120
|
1,320
|
550
|
Sundry expenditure
|
5,280
|
2,640
|
900
|
2,000 tonnes of copra were consumed and the purchase
price was Rs 400 per ton.
Output
was 1,200 tonnes of crude oil, 850 tonnes of refined oil and 840 tonnes of
finished product (in casks) ready for delivery.
The difference in tonnage in respect of crude oil is not
all loss, 240 tonnes of crude oil is being sold as crude oil at cost plus 20%.
Copra
was brought to the factory in heavy tins and those were sold for Rs 1,500.
600 tonnes of copra residue were sold for Rs 35,000 and
80 tonnes of waste from refining process were sold for Rs 9,500. The cost of
casks used in finishing process was Rs 24,000. The casked oil was sold for Rs
1,000 per tonne.
You are required to prepare Process
Cost Accounts, showing the cost per tonne of output at each stage of
manufacture. Also calculate the total profit for the period.
Q15. A product passes through three
processes A, B and C. 10,000 units at a cost of Re 1 were issued to Process A.
The other direct expenses were:
|
|
Process A
|
Process
B
|
Process
C
|
Particulars
|
Rupees
|
Rupees
|
Rupees
|
|
Sundry Material
|
1,000
|
1,500
|
1,480
|
Direct Labour
|
5,000
|
8,000
|
6,500
|
Direct Expenses
|
1,050
|
1,188
|
1,605
|
The wastage of Process A was 5% and Process B 4%. The
wastage of Process A was sold at Re 0.25 per unit, of B at Re 0.50 and of C at
Re 1 per unit. The overheads charges were 168% of direct labour. The final
product was sold at Rs 10 per unit, fetching a profit of 20% on sales. Find the
percentage of wastage in Process C.
Q16. Model Ltd. processes a patent material
used in building. The material is produced in three consecutive grades – soft,
medium and hard.
Particulars
|
Process I
|
Process
II
|
Process
III
|
Raw Materials Used
|
1,000 tons
|
|
|
|
Cost per ton
|
Rs 200
|
|
|
Manufacturing Wages & Expenses
|
Rs 87,500
|
Rs 34,500
|
Rs 10,710
|
|
Weight lost (% of input of the
process)
|
5%
|
10%
|
20%
|
|
Scrap (sale price Rs 50 per tonne )
|
50 tons
|
30 tons
|
51tons
|
|
Sale price per ton
|
Rs 350
|
Rs 500
|
Rs 800
|
Management expenses were Rs 17,500 and selling expenses
Rs 10,000.
Two-thirds of the output of Process I and one-half output
of Process II are passed on to the next process and the balance are sold out.
The entire output of Process III is sold. Prepare the three process accounts
and statement of profit.
Q17. Modern Process Ltd. makes and sells
their chemicals manufactured to three consecutive processes. The products of
these processes are dealt with as under:
Particulars
|
Process I
|
Process
II
|
Process
III
|
Transferred to next process
|
66⅔%
|
60%
|
|
|
Transferred to warehouse
|
33⅓%
|
40%
|
100%
|
In
each process 4% of the weight put in is lost and 6% is scrapped, from which
Process I realises Rs 3 per ton, from Process II and Process III Rs 5 and Rs 6
per ton separately.
The following information relates to July, 2007:
Particulars
|
Process I
|
Process
II
|
Process
III
|
Raw Materials Used
|
1,400 tons
|
160 tons
|
1,260 tons
|
|
Rates per ton
|
Rs 10
|
Rs 16
|
Rs 7
|
Wages & Other Expenses
|
Rs 5,152
|
Rs 3,140
|
Rs 2,895
|
Prepare process accounts showing cost per ton of each
process.
Q18. A firm has three workshops and a
wholesale warehouse. The following details are extracted from its books for the
year ended on 31st December, 2008
Particulars
|
Workshop A
|
Workshop
B
|
Workshop
C
|
Raw Materials Used : Tonnes
|
250
|
152
|
145
|
|
Cost per ton (Rs)
|
120
|
80
|
50
|
Direct Wages (Rs)
|
85,800
|
20,250
|
10,560
|
Direct Expenses (Rs)
|
13,800
|
13,870
|
2,250
|
Loss of change due to processing
|
4%
|
5%
|
2.50%
|
Proportion of production transferred:
|
|
|
|
To Workshop B at cost
|
20%
|
|
|
To Workshop C at cost
|
|
50%
|
|
To Wholesale Warehouse
|
80%
|
50%
|
100%
|
Wholesale Warehouse:
|
|
|
|
|
Stock on 1.1.2008 at cost
ex-workshop (Rs)
|
2,500
|
2,000
|
4,000
|
|
Stock on 31.12.2008 at cost
ex-workshop(in tons)
|
10
|
20
|
40
|
|
Sale of products (Rs)
|
4,00,000
|
|
|
|
Salaries (Rs)
|
40,000
|
|
|
|
Administrative Expenses (Rs)
|
20,000
|
|
|
The closing stock in the wholesale warehouse are to be
valued at the prime cost per tonne during the year. You are required to:
a. Prepare Cost Accounts for
the year in respect of each workshop
b. Calculate the prime cost
per tonne of each process, and
c. Prepare an account showing
the net profit of the business for the year 2008
Q19. Prepare necessary accounts:
|
Particulars
|
Process A (Rs)
|
Process
B (Rs)
|
|
Materials
|
10,000 @ Rs 10 per unit
|
|
Wages
|
5,000
|
2,000
|
|
Overheads
|
3,100
|
295
|
|
Normal Wastages
|
10%
|
10%
|
Scrap Value (per unit)
|
Re 1
|
Rs 2
|
|
Abnormal Wastages (units)
|
Half of normal wastage
|
|
|
Abnormal Gain (units)
|
|
Half of normal wastage
|
|
Output (units)
|
?
|
8,075
|
Q20. A product passes through three
processes called A, B and C.
The following data was furnished to
you for March, 2009.
|
Process
|
A
|
B
|
C
|
|
|
Units
|
Units
|
Units
|
|
Input of Raw Material
|
20,000
|
?
|
?
|
Stock of finished product:
|
|
|
|
|
Opening
|
2,000
|
3,000
|
5,000
|
|
Closing
|
1,500
|
4,000
|
?
|
Output Actual Output
|
19,500
|
19,250
|
15,900
|
Sales
|
-
|
-
|
16,900
|
|
Normal Process Scrap
|
2%
|
5%
|
10%
|
|
|
Rs
|
Rs
|
Rs
|
|
Input of Raw Material
|
8,000
|
-
|
-
|
|
Indirect Material
|
4,000
|
1,500
|
1,000
|
|
Direct Labour
|
6,000
|
4,000
|
3,000
|
|
Manufacturing expenses
|
640
|
225
|
2,405
|
Rates per unit
|
|
|
|
|
Process Scrap
|
0.05
|
0.05
|
0.20
|
|
Stock value of finished product:
|
|
|
|
|
Opening
|
1.00
|
1.50
|
1.80
|
|
Closing
|
1.00
|
1.50
|
?
|
|
Sales Price
|
-
|
-
|
2.50
|
Prepare:
i.
Process
accounts to find the cost per unit at the end of each process;
ii.
Process
stock accounts to find out the value at which transfers take place from one
process to the next and the gross profit.
