PROCESS COSTING SUMS
1. The product of a company passes through three distinct processes X, Y and Z. It is
ascertained that wastage in each process is as under:
X – 2%, Y – 5% & Z – 10%.
The wastage of each process possess a scrap value as X – Rs. 5 per unit, Y – Rs. 5 per unit
and Z – Rs. 20 per 100 units.
The following information is obtained:
Particulars Process X Process Y Process Z
Materials consumed 6,000 4,000 2,000
Direct labor 8,000 6,000 3,000
Manufacturing expenses 1,000 1,000 1,500
20,000 units have been issued to Process Z at a cost of Rs. 10,000. The output of each process
has been as under:
Process Z; 19,500 units; Process Y; 18,800 units; Process Z; 16,000 units.
Prepare Process Accounts.
2. Product P passes through 3 processes to completion.
Following are the relevant details:
Particulars Process I Process II Process III
Direct Materials 2,000 3,020 3,462
Direct wages 3,000 4,000 5,000
Direct expenses 500 226 -
Production Overheads - - -
Normal loss 10% 5% 10%
Scrap value 3 3 6
1,000 units at Rs. 5 were issued to Process I.
Output for each process was:
Process I: 920 units
Process II: 870 units
Process III: 800 units
Production overheads is allocated to each process on the basis of 50% of direct labor.
Prepare Process A/c, Normal loss A/c, Abnormal Loss A/c and Abnormal Gain A/c.
3. Prepare Process A/c from the following information:
Particulars Process A Process B Process C
Material 8,200 3,960 5,924
Direct wages 4,000 6,000 8,000
Production overheads - - -
1,000 units were introduced at Rs. 6 per unit in Process A.
Production overhead to be distributed as 100% on direct wages.
Actual output Units Normal loss Value of scrap
Process A 950 5% 4
Process B 840 10% 8
Process C 750 15% 10
4. The product manufactured by the Standard Chemicals Ltd. Passes through 3
processes: I, II & III.
Particulars I II III
Materials consumed 40,000 7,500 5,000
Direct wages 22,500 10,000 10,000
Direct expenses 20,500 2,250 2,505
Output 3,900 3,850 3,200
Normal loss 2% 5% 10%
Scrap value 13.50 16.25 21
4,000 units of raw materials were introduced in Process I at a cost of Rs. 20,000.
Prepare Process A/c, Normal loss A/c, Abnormal Loss A/c and Abnormal Gain A/c.
