PROCESS PRACTICE QUESTIONS

Question One
A product passes through three distinct processes to completion. These processes are
numbered respectively 1, 2 and 3. During the week ended 31 January 1,000 units are
produced. The following information is obtained.
Process 1 Process 2 Process 3
Materials 6,000 3,000 2,000
Labour 5,000 4,000 5,000
Direct expenses 1,000 200 1,000
The indirect expenses for the period were GHS2,800 apportioned to the processes on the
basis of labour cost.
Required:
Prepare process accounts showing total cost and per unit cost

Question Two
A food manufacturing process has a normal wastage of 5% which can be sold as animal
feedstuff at GHS5 tonne. In a given period the following data were recorded:
Input material 160 tonnes at GHS23 per tonne. Labour and overheads GHS2,896. Losses
were at normal level. Compute the cost per tonne.
Question Three
Assume the same data as in Question 2 except that actual production was 148 tonnes.
Compute the abnormal loss and show the relevant accounts.

Question Four
Again assume the same data as Question 2 except that the actual production was 155 tonnes
calculate the abnormal gain and show the relevant accounts.

Question Four
In a given period production and cost data were as follows:
Total Costs Materials GHS5,115
Labour 3,952
Overheads 3,000
12,067

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Production was 1,400 fully complete units and 200 partly complete. The degree of
completion of the 200 units WIP was as follows:
Material 75% Complete
Labour 60% Complete
Overheads 50% Complete
Calculate the total equivalent production, the cost per complete unit and the value of WIP.

Question Five
The following data relate to Process Y for accounting period 2. At the beginning of period 2,
there were 800 units partly completed which had the following the following values:
Value Percentage
GH¢ Complete
Input material (from Process X) 8,200 100%
Material introduced 5,600 55
Labour 3,200 60
Overheads 2,400 45
During the period 4,300 units were transferred from Process X at a value of GH46,500 and
other costs were:
Material introduced GH¢24,000
Labour 19,500
Overheads 18,200
At the end of the period, the closing WIP was 600 units which were at the following at the
following stage of completion:
Input material 100% Complete
Material introduced 50% Complete
Labour 45% Complete
Overheads 40% Complete
The balance of 4,500 units was transferred to finished goods. Calculate the value of units
transferred to Finished Goods and the value of WIP and prepare the Process account using
i. The FIFO method
ii. The weighted average cost method

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Question Six
The following data relate to Process 2 for one accounting period. Process 2 receives units
from Process 1 and, after processing, transfers them to Process 3.
Opening WIP 600 units
Value (GH¢) Percentage Complete (%)
Input materials 720 100
Material introduced 500 60
Labour 340 50
Overheads 270 40
Transfers from process 1: 4,100 units valued at GH¢5,200.
Transfers to process 3: 3,500 units
GH¢
Material introduced 2,956
Labour 2,200
Overheads 1,900
Closing stock 800 units at the following stage of completion
Input material 100% complete
Material introduced 60% complete
Labour 50% complete
Overheads 40% complete
400 units were scrapped at the following stage of completion
Input material 100% complete
Material introduced 100% complete
Labour 40% complete
Overheads 30% complete
The normal loss is 10% of production and the scrapped units realised 40 pesewas each.
It is required to prepare the Process Account for Process 2 using the FIFO method and the
weighted average cost method