Ten marks
1. Product B is obtained after it passes through three distinct process. The information is
obtained from the accounts for the week ending 31st October 2021:
Items Total Process
I II III
Rs. Rs. Rs. Rs.
Direct materials 7,542 2,600 1,980 2,962
Direct wages 9,000 2,000 3,000 4,000
Production overheads 9,000
1,000 units at 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 cost is recovered on 100% of direct wages. The following additional data are
obtained:
Process Output during the Percentage of normal Value of scrap per
week loss to input unit
Process I 950 units 5% Rs. 2
Process II 840 10% 4
Process III 750 15% 5
Prepare process cost accounts and abnormal gain or loss accounts. (M.N.Arora – 9.31)
2.
Product X is obtained after it is processed through three distinct processes. The
following cost information is available for this operation.
Particulars Total Process I Process II Process III
Materials 5,625 2,600 2,000 1,025
Direct wages 7,330 2,250 3,680 1,400
Production overheads 7,330 - - -
500units at Rs.4 unit were introduced in process I. production overhead are absorbed as
percentage of direct wages.
The actual output and normal loss of the respective processes are:
Particulars Output units Normal loss of Value of scrap
input per unit(Rs.)
Process I 450 10% 2
Process II 340 20% 4
Process III 270 25% 5
There is no stock or work-in-progress in any process. Show
a) The three process accounts
b) The abnormal loss and
c) Abnormal gain accounts (Ravi M.Kishore – 364)
3.
A product is manufactured by passing through three processes A,B,C. In process c a by-product is
also produced which is then transferred to process D where it is completed. For the first week in
January, the actual data included.
Particulars Process
A B C D
Normal loss of input (%) 5 10 5 10
Scrap value (Rs.p.u) 1.50 2.00 4.00 2.00
Estimated sales value of by-product (Rs.p.u) - - 8.00 -
Output (units) 5,760 5,100 4,370 -
Output of by-product (units) - - 510 450
Direct materials (6,000 units)(Rs.) 12,000 - - -
Direct materials added in process (Rs.) 5,000 9,000 4,000 220
Direct wages (Rs.) 4,000 6,000 2,000 200
Direct expenses (Rs.) 800 1,680 2,260 151
Budgeted production overhead (based on direct wages) for the week is Rs.30,500. Budgeted direct
wages for the week is Rs.12,200. You are required to prepare:
a) Accounts for processes A,B,C and D
b) Abnormal loss and abnormal gain accounts
c) A brief note on the abnormal losses and abnormal gains for the use of management.
(Ravi M.Kishore – 374)
4. A product passes through three processes A,b,c after which it is transferred to finished
stock. The following information is supplied for the month of March:
Particulars Process A Process B Process C Process D
Opening stock 1,000 1,200 800 3,000
Direct materials 2,000 2,100 3,000 -
Direct wages 1,500 1,500 1,600 -
Production overheads 1,400 600 4,000 -
Closing stock 500 600 400 1,500
Profit % on transfer price 25% 20% 20% -
Inter process profit for - 200 200 1,100
opening stock
Stock in processes are valued at prime cost and finished stock has been valued at the
price at which it was received from process C. sales during the period were valued at
Rs.35,000
You are required to :
a) Prepare process accounts showing profit element
b) Compute actual realized profit; and
c) Compute stock valuation for balance sheet.
(M.N .Arora – 9.57)
5.
A product passes through three processes-A, B and C. The details of expenses incurred
on the three processes during the year 2016 were as under:
Units used Process A Process B Process C
1,000
Cost per unit 50 - -
Sundry materials 1,000 1,500 500
Labour 2,600 8,000 6,392
Direct expenses 600 1,815 2,720
Sale price of output (per unit) 70 100 200
Actual output of the three processes was- process A 930 units, Process B 540 units and
Process C 210 units. Two-third of output of Process A and one-half of the output of
process B was passed on to the next process and the balance was sold. The entire
output of process C was sold.
The normal loss of the three processes, calculated on the input of every process was:
Process A- 5%, Process B- 15%, and Process C – 20%. The loss of process A was sold
at Rs.1 per unit, that of Process B at Rs.3 per unit, and that of Process Cat Rs.6 per
unit. Selling and distribution expenses during the year were Rs.9,000. These are not
allocable to the processes but to be considered while drawing the Income statement.
Prepare the three processes accounts and a statement of income. (Ravi M.Kishore –
370)
6.
Chemicals Ltd Processes a patent material used in buildings. The material is produced
in three consecutive grades- soft, medium and hard.
Particulars Process M Process N Process O
Raw materials used 1,000 tonnes - -
Cost per tonne Rs.200 - -
Manufacturing wages and exp. Rs.87,500 Rs.39,500 Rs.10,710
Weight lost (% of input of the process) 5% 10% 20%
Scrap (sale price Rs.50 per tonne) 50 tonnes 30 tonnes 51 tonnes
Sale price per tonne Rs.350 Rs.500 Rs.800
M.N.arora -9.11
7.
A company manufactures a chemical product by a series of operations in three
processes. Raw material is fed into process I and finished chemical that comes out of
process III is transferred to finished goods store. The following particulars relating to
operations for April 2017 are given below:
Particulars I II III
Raw materials issued 80,000 kgs. Rs. 9,60,000 - -
Direct wages Rs. 1,25,600 Rs.1,72,000 Rs.1,42,500
Overhead costs Rs.1,68,000 Rs.1,77,280 Rs.1,24,600
Normal processing loss (% of input) 3% 2% 1%
Output transferred to next process 74.000 kgs. 69,400 Kgs. 69,000 Kgs.
Work in process 3,000 2,400 -
(processed material awaiting transfer
to next process)
Prepare the accounts of processes I,II,III and also abnormal loss and abnormal gain
accounts if any.(jain – 18.10)
7. Product passes through three processes to completion these process are known as x y and
Z the output of each process is charged to the next process at a price calculated to give a
profit of 20% on the transfer price the output of process C is charged to finished stock on
a similar basis.
There was no partly finished to work in any process on December 31st, on which date the
following information was obtained:
Particulars Process A Rs. Process B Rs. Process C Rs.
Materials 4,000 6,000 2,000
Labour 6,000 4,000 8,000
Stock: Dec 31 2,000 4,000 6,000
Processes were valued at price cost to the process.
There was no stock in hand on January 1st and question of overhead was ignored. Of the
goods Processed into finished stock Rs. 4000 remained in hand on December 31st and the
balance has been sold for Rs.36,000. Show process accounts and calculate reserve for
unrealised profits. (Pillai – 515 )
8. A Limited produces product AXE which passes through two processes before it is
completed and transferred to finished stock. The following data relate to oct 2020
Particulars Process Finished
I II
Opening stock 7,500 9,000 22,500
Direct materials 15,000 15,750 -
Direct wages 11,200 11,250 -
Factory overheads 10,500 4,500 -
Closing stocks 3,700 4,500 11,250
Inter process profit included in 1,500 8,250
opening stock
Output of process I is transferred to process II at 25% profit on the transfer price output of
process II is transferred to finished stock at 25% profit on the transfer price.
stocks in processes Are valued at Prime cost. Finished stock is valued at the price at
which it is received from process II. sales during the period is .Rs. 1,40,000
Prepare process cost account and finished stock account showing the profit element at
each stage (M.N Arora – 9.27)
9. Chemicals Limited processes a patent material used in buildings the material is produced
in three consecutive great soft medium and hard
Process I Process II Process III
Raw Material used 1,000 tonnes - -
cost per tonne Rs. 200 - -
Manufacturing wages Rs.87,500 Rs.39,500 Rs.10,710
and expenses
Weight lost(1% of 5% 10% 20%
input of process)
scrap(sale price Rs.50 50 tonnes 30 tonnes 51 tonnes
per tonne)
sale price per tonne Rs.350 Rs.500 Rs.800
Management expenses were Rs.17500 and selling expenses Rs.10000 two third of the
output of process I and one half of the output of process II are passed on to the next
process and the balance are sold the entire output of process III is sold prepare the three
process accounts and the statement of profit make a approximations, where necessary.
(M.n arora 9.11)
10.A product passes through three processes ABC the normal wastage of each process is as
follows process A 3% process B 5% process C 8%. wastage of process A was sold at 25 p
per unit that of process B at 50 P per unit and that of process C at Rs.1 Per unit
10000 units were issued to process A in the beginning of october 2020 at the cost of Rs.1
per unit the other expenses were as follows
A B C
Sundry materials 1,000 1,500 500
Labour 5,000 8,000 6,500
Direct expenses 1,050 1,188 2,009
actual output 9,500 units 9,100 8,100
units units
prepare the process accounts assuming they that there were no opening or closing stock
also gave the abnormal wastage and abnormal gain account (M.n arora 9.4)
11.A product passes through three processes ABC the details of expenses incurred on the
three processes during the year 2016 were as under
Units issued A 1,000 B C
Cost per unit 50 - -
Country materials 1,000 1,500 500
labour 2,600 8,000 6,392
Direct expenses 600 1,815 2,720
Sale price of output per unit 70 100 200
Actual output of the three processes was process A 930 units process B 540 units and C
210 units two third of output of process A and one half of the output of process B was
passed on to the next process and the balance was sold the entire output of process C was
sold
The normal loss of three processes calculated on the input of every process was process A
5% process B 15% and process C 20% the loss of process A was sold at one per unit that
of process B at 3 per unit and that of process at 6 per unit. Selling and distribution
expenses during the year were Rs. 9000 there are not allocable to the processes but to be
considered while drawing the income statement
Prepare the three processes accounts under statement of income (Ravi- 370)
