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Practical Problems

The document outlines the costs associated with three manufacturing processes, detailing materials, labor, and other expenses for each process. It provides calculations for cost per article and total costs based on production figures for specific months. Additionally, it discusses handling normal and abnormal losses in production processes with examples and calculations for various scenarios.

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charleschirwa477
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8 views1 page

Practical Problems

The document outlines the costs associated with three manufacturing processes, detailing materials, labor, and other expenses for each process. It provides calculations for cost per article and total costs based on production figures for specific months. Additionally, it discusses handling normal and abnormal losses in production processes with examples and calculations for various scenarios.

Uploaded by

charleschirwa477
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Practical Problems

Process Losses

I. An article undergoes three processes. From the following information, show the cost of each process
of manufacture and cost per article produced during the month of January 2004. Process A Process B
Process C Rs. Rs. Rs Materials consumed 37,500 J 2,500 5,000 Labour 20,000 50,000 15,000 Other direct
expenses 6,500 18,000 6,250 The Indirect expenses amounted to Rs. 21,250. These are apportioned on
the basis of wages. Articles produced during the month were 240. (B. COlli. Bharathidasan) (AilS. Cost
per article-A Rs. 287.50; B Rs. 675; C Rs. 800) 2. A produet passes through three distinct processes to
completion. During March 2006, 500 Units were produced. From the following information, prepare
process accounts showing the total cost as well as cost per unit. Process I Process " Process III Rs. Rs. Rs.
Materials Labour 10,000 7,000 3,000 2,500 2,000 2,500 Direct expenses: Fuel 500 Carriage 1,500 Works
overheads 2,000 Indirect expenses Rs. 14,000 should be apportioned on the basis of wages. (ADS. Cost
per unit - Process IRs. 21,500 ... 500 units = Rs. 43 Process /I Rs. 38,500 ... 500 units = Rs. 77 Process III
Rs. 52,500 ... 500 units = Rs. 105) 1,000 500 2,500 500 1,000 2,000 (B. Com., Madras) 3. In Process X, J 00
units of raw matenals, bought at the rate of Rs. J 0 p.u. were introduced. Other expenditure incurred in
the process was Rs. 800. Normal loss is 10% of the input. The scrap value of normal loss units is Rs. 3 p.u.
The output of process X was only 75 units. Prepare process X account. (M Com., Blwrathidasan) (ADS.
Abnormal loss = J 5 units @ Rs. 20 = Rs. 300) 4. 600 kg. of a matenal was charged to Process A at the rate
of Rs. 4 per kg. The direct labour accounted for Rs. 200 and the other departmental expenses amounted
to Rs. 760. The normal loss IS 10% of the input and the net production was 500 kg. Assuming that
process scrap IS saleable at Rs. 2 per kg. prepare a ledger account of process A clearly showing the
values of normal and abnormal loss. (AilS. Tr to Process B 500 kg. @ Rs. 6 = Rs. 3,(00)

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