SECTION-B

Question 1

Following infomation is available regarding process Afor the month of February, 2014
Production Record:
Unts in process as on 01.02.2014 4,000
(Al matenials used, 25% Complete lor labour and overhead)
New units introduced 16,000
Unts compleled 14,000
Units in process as on 2802.2014 6000

(Almaterials used, 33-1/3% complete for labour and overhead)

Cost Records
Work-in-process as on 01.02.2014
6,000
Materials
Labour 1,000
Overhead 1000
&000
Cost during the month
Matenials 25,600
Labour 15,000
Overhead 15,009
55600

The Jnstitute of Chartered Acconntants ofndia

 Process&Operation Costing
is used.
Presuming that avex.nge mthod of mvmtory preyre
Statement of t quivalent Procton
(Statementshowng Cost lor exh ckment
(i) Statement of Apportionmet of cost.

() Process Cost Account for Process A

Solution:

Statement of Equivalent Production (Average cost methoc)

Input Particulars | Output Equivalent Procduction
Units Overheads
(Units) Materials Labour
(%) Units(%)Units" (%) Units
20,000 Completed 14,000 100 14,000 100 14,000 100 14,000
WIP 6,000 100 6,000 33-1/ 2,000 33-/ 2,000
20,000 20,000 20,000 16,000 16,000
Percentage of completion Equivalent units
Statement showing Cost for each element
(i)
Particulars MaterialsLabour 0verhead Total
Cost of opening work-in-progress (3) 6,000 1,000 1,000 8,000

Cost incurred during the month() 25,600 15,000 15,000 55,600

Toal cost(): A) 31,600 16,000 16,000 63,600
Equivalent units: (B) 20,000 16 000 16,000
1.58 1 3.58
Cost per equivalent unit ():C= (A+B)
Statement of Apportionment of cost
()
Value of output transferred: (A) (14,000 unitsx 3 58) 50,120

Value of closing work-in-progress: (8)

Material (6.000 units x 1.58) 9,480
Labour (2,000 units x 1) 2,000
Overhead (2,000 units x71) 2,00 13,480

Total cost: (A+8) 63,600

Process- A Account
(iv)
Units
Particulars Units )Particulars
8,000 By Completed units 14.000 50,120
To Opening WIP 4,000
25,600 By Closig WIP 6,000 13,480
To Materials 16,000

Acconniants of India
T h e Institn:te cf C hartered
 9.6 Cost Accounting

To Labour 15,000
To Overhead 15,000
20,000 63,600 20,000 63,600

Ouestion2
 Question 4
A Chemical Company carries on production operation in two processes. The material first
pass through Process I, where Product 'A'is produced.
Following dhala are given for the montth just ended:
Material input quantity 2,00,000 kg.|
Opening work in progress quanlily

The lustitute of Chartered Acconntants of India

 Process&Operation Costing 911
Mxer 120 antcomersnSo%compkte) 40.000 Ng
Wakcampetedqurnity 1,60,000 kg
Cksing wak nrgss quTty
Mseral 120% and canerson tao-thrd corpkte) 30,000kg
Materialinul co
75.00
Processing ca 7102000
Openng warknpogress cast
Material cost
20.000
Processing cost
12000
Normal process loss in çuantiy may be assumed to be 20% of material input. It has no
reaksable value
Any quantityof Produd 'A can be sold for 1.60 per kg.
Alternatively, i can be ranserred to Process i for futher processing and then sold as
Product AX for R2 per kg. Further materials are added in Process Il which yield two kg of
product AXfor evary kg. d Product 'A'of Process I.
Ofthe 1.60.000 kg. per morth of work completed in Process 1 40.000 kg. are sold as Product
A and 1.20,000 kg. are passed through Process I for sale as Product 'AX. Process lI has
facities to hande upto 1,60,000 kg. of Product'A "per month, ifrequired
The manthly costs incured in Process I (other than the cost of Product A) are:
120,000 kg of Product 'A input 1,60,000 kg. of Product A input

Materias Cost 1,32.000 1,76,000

Processing Costs 1.20.000 1,40 000

Requred:
0 Determine, using the weighled average cost method the cost per kg of Producl A in
Process I and value of both work compleled and cosing workinprogress for the menth
just ended.
I s i wortihshile processing 1.20,000 kg. of Product 'A futher?
()Calculate the minimum acceptable seliling price per kg. il a potential buyer could be
found for additional outpul of Product 'AX' that could be produced wlh the remaining
Product'A quantity.

The Institute of Chatterei Accountauts of }ndia

 9.12 Cost Accounting

Solution
Process-I
Statement of Equivalent Production

nputs Output Equivalent output

Material Conversion
ParticularS Kg. Particulars Kg.
(%) kg. (%) kg.
Opening W.P 40,000 Normal loss 40,000
New material Units
introduced 2,00,000 introduced&
completed 1,60,000 100 1,60,000 100 1,60,000

Abnormal loss 10,000 100 10,000| 100 10,000

Closing WIP 30,000 100 30,000 2/3d 20,000
240,000 2,40,000 2,00,000 1.90,000
Process-I
Statement of Cost for each element
Elements of cost Costs of Costsin Totalcost EquivalentCostper
opening WIP process units Kg.
Kg.
Material 20,000 75,000 95,000 2,00 000 0.475
Conversion cost 12,000 1,02,000 1,14,000 1,90,000 0.600
32,000 1,77,0002,09,000 1.075
Statement of Apportionment of Cost
Units completed units Cost/unit Cost Total cost
ElementsEquivalent
(kg)
Work completed Material 1,60,000 0.475 76,000
Conversion 1,60,000 0.600 96,000 1,72,000
Closing WiP | Material 30,000 .475 14,250
Conversion 20,000 0.600 12,000 26,250
Gi) Statement showing comparative data to decide whether 1,20,000 kg. of product 'A'
should be processed further into 'AX.
Alternative 1-To sell preduct A' after Process-1 ()
Sales 1,20,000 kg. x 7 1.60 1,92,000
Less. Costfrom Process-1 1,20,000 kg. x7 1.075 1,29.000
Profit 63.000

The Institute of Chartered Accountants of India

 Process&Operation Costing 9.13

Alternative l- Process further into AX

Sales 2,40,000 kg x 200 4,80,000

less Cost from Process- 11,20,000 kg. x7 1.075 = 71,29,000o

Matenial in Process-II =71,32,000o

Processing cost in Process-l -120000 381000
Proft 2000
Hence company should process further

t willincrease proft by ? 99,000-7 63,000 36,000

Gi) Calculation of minimum selling price per kg.:
Cost of processing remaining 40,000 kg. urther
Material 1,76,000- 1,32,000 44,000
Processing cost 1,40,000-71,20,000 20,000
Cost rom process- I relating to 40,000 kg.
A
(40,000 kg, 1.075) 43,000
Benefit foregone f 40,000 kg. 'A' are further processed
x

40,000 kg. ( 1.60-7 1.075) 21.000

Total cost 1,28,000
Additional
quantity ofproduct 'AX (40,000 kg. x72) 80 000
1.28,000
:. Minimum selling price = 71.60
80,000kg.
 Question 6

oulput of process
The 'X' and Y is
A product passes irough three processes x, Y and Z. of
ransferred to next process at cost plus 20 per cent each on ransler price and the Output
of 25 per cent on transier price. The
process "Z'is iansferred lo Iinished slock at a prolt
31st March, 2014:
Tolowing in/omation are available n respect of the year endng
Process-X Process-Y Process-2 Finished
Stock

Opening stock 15,000 27.000 40,000 45,000

Matenial 80,000 65,000 50,000

Wages 1,25,000 1,08000 92,000

Manulactuning Overheads 96,000 72.000 66,500
Closing stock 20,000 32,000 39,000 50,000
Inter process prolit included in
NIL 4,000 10,000 20,000
pernng stock
Stock in processes is valued at prime Cost. The finished stock is valued at the price al which it
is received irom process Z. Sales of the finished stock during the period was 7 14,00,000

You are required to prepare:

Process accounts and finished stock account showing profil element at each stage.

(i) Costing Proft and Loss account

CThe Institnte of Chartered Accountauts of India

 Process &Operation Costing 917

Balmce Shwet
Hems in the
Show the relevnt
i)
Solution:
Process 'X Account
(0 Cr.
Dr Total Particulars Cost Prolt Total
Cost Prolit
Particulars () )
To Opening Slock 15,000 15,000 By Proces Y2%6000 14,000 3,70,000
Nc (Transler)

80,000 80,000
To Matenal
125,000 1,25,000
To Wagas
2,20,000 220,000
Tolal
Less Closing stock 20,000 20,000
2,00,000 2,00,000
Pane Cost
To Manutactuning 96,000 96,000
Overheads
Total cost 2,96,000 2,96,000
To Costing Prolt and 74,000 74,000
Loss Nc (20% on
transker Price or 26% on
cost)
2,96,000 74,000 3,70,000| 2.96,000 74,000 3,70,.000
Process 'Y Account
Dr.
Cr.

Cost Profit Total Cost Profit Total

Particulars Particulars ( )

To Opening Stock 23,004,000 27,000By Process Z Nc| 5,36,379 2,26,121 762500

(Transfer)
To Process XNc 2,96,000 74,000 3,70,000|
To Matenal 65,000 65,000
To Wages 1,08,000 1,08,000
Total 4,92,000 78,000 5,70,000
Less Closing stock 27,621 4,379 32,000
Prime Ccst 4,64,379 73,621 5,38,000
To Manufacturing
72,000 72,000
Overheads
Tolal cost | 5,36,379 73,521 6,10,000

The ustitnte of Chartered Accountants of india

 9.18 Cost Accounting
Process&Operalin Coning 919
Cong Prot and
wler Pe or 25% on
1502500 1,52 00 C o s t i n g P r o f i t & L o s s Account

March 2014
for the year
ending 31
5363/9 2,121 769 500 5.6 379 26,121 76 500
Armaut
Armount Parteulars

D Process 7 Account Dr
Particulars Provision for unreaized probt
Cr By
Parbculars CostProBit Total
Farliculars CostProlit Total Provision
for
unrealized on opening stock
10.000- 2000) 34 000
To Opening Sock
To
profit on
closing
stock 35,362 4 000 7490
A379 9750 21233) X Ac
30,00 10.000 40,000 8y Finshed Stock|7,45629 550,371
658,138 By Process
152500
Nc (Transler) 1296,000 By Process YAC
To Prooess Y AC 5,35,379 226,121 7,62500
To Net Proft
By Process ZAc 324000
To Maleral 50,000 Stock Ave 1.09 000
50,000 By
Finished

693500
To Wages 92 000 92000 693500
Tolal 7.08 379 236,121 944500
Less Closing slock 29 250 9,750 39.000 stock
|PtineCost Workings:
6,79,129 226,371 905500 of amount
of
unrealized profit on closing

To Manufactuing Calculation

Overheads 66500 66,500 Process X = Ni

Total cost 74,379
745,529 26371 9.72.000 78,000
x32,000
To Costng Prolt and 324,000 324,000 ProcessY 75,70,000

Loss AC (% on 3 9 . 000 9.750

transler Pnce or 33
1/3% on cor
236,121
Process Z 79,44,500

745,529 550371 1296.000 7.45,629 550371 12,96,.000 5.50,37 x7 50 000 21233

Finished Stock =

Finished Stock Account 12.96,000

2014 (Extract)
31st March,
Dr Cr. Balance
Sheet as on
Amounl
Assels
Cost Profit Total Cost Profit Total Amount
Particulars Particulars Liabilities R)
45,000 By Cosing Pail Ac| 741862 6,58,138 14,00,000 658 138 Closing stock 20,000
To Opening Siock 25.000 20000 Net pront ProcessX

NC(Iransle Process-Y
32000
To Prooess Z Nc 7-45,629 550371 12,96,000 Process-2
39000
Total 7.70,529 5,70371 1341.000 50 000
Finished stock
Less Closng stock 28,167 21233 5000 1,41000
| To Costng Proft and 7,41,862| 5,49,138 12,91,000 for unrealized profit 35362
less Provision
Loss NG 105 658
1.09.000 1,09,000
741.862 658 134 409 00 741,8652 658,138 14 00,0

ArounBaals
of lndha
The lastitrte of Chaitered Aceronntants
of Tudia The ustitute of Chautered
 92
ien Costing
9.22 Cost Accounting Process &iper

Question8
AmMAM
Process1 Accout

J L
prodtars a proMatAZE which
outpE of ech process is passes
pIrss A The thvough two proxesses viz. Ameuunt Puticidar
wNch &is bansierred and beakd as the raw matevial process and
of the ncxl 2200
18.99
oupt of the second
fokwing data relaterd ko Decenmber, 2013 process s ansferred to fintshed process
lo Patic ulw Nomal
wastange

stock The 7,15,000 8y 78 50)

22000
(2200
unts
20000 9OO0
hoess To ProcessI Finished
stock
2500 unts nrodred al a cost of rccess / 96,020 By unts

Materisl cornsumed 2.00.000 To Material

(20 000

49 50)
Orrt labour 1.92.000 96.020
Manuactuning expenses 224.000 1,28.000 To Direct Labour
1,28,.000

Nomal wastage ol input 1,40,000 60000 To Manufachuring Exp

60,000
10% 10% 00 9,900
Saap vake afnormal wastage (per un) To Abnormal Gain
A/c
22200 10,082
990
Ouput in Uhats (200 units 49 50) 22200 10,08,920
22.000 20.000
Requred
unit
0 Prepare Processl and Process ll accounl. 79,99,020-7189207 49.50 per
Prepare Abnormal Gain/ Loss account as the case may be lor each process. Cost per unit22.000units-2,200unis Abnormal Loss Account

UnitsAmount
Solution:
Anuud Partrculars

Units
Process-1 Account Particulars
500 4950
(Sales)
Particulars Units Ameint Particulars Units 16.250 By Cash
Amount ToProcess-INC
500
(500units 9
90)

Profit and

To lnput 25,000 2,00,000 By Normal waslage

By Costing 11.30
2,500 24,750 Loss AC
500 16.250
(2,500 units x9 90)
500 16 250|
To Material 1.92,000 By Abnormal loss Alc 500 16,250 Abnormal Gain Account
(500unitsx 3250) Unts Amount
To Direct Labour 2,24,000 By Process- I 22,000 7,15,000 Particulars
Units
AmountParticulars

(
(22,000 nits 32 50) () 9,900
200
II A/c
To Manufacturing Exp 1.40,000 200 1,720 By Process
To Normal wastáge
25,000 7,56,000 25,000 7,56,000 8 60)
(200 unitsx 8,180
To Costing Profit and
Cost per uniR750,000-24,0= 732.50 per unit
20
9.900
25,000 units-2,500uni Loss
200 9,900

The Institute of Cha:tered Arcountants ef India Charterru

Aconnts
o Indna
The !nstitnie of
 8

3 s 32
 9.26 Cost Accounting

Material Process&Operation Csling 971

5,61,750 Cost per Unit ()

Labour 41,160units Abnormal Loss A c c o i

13 648 ina Apre

Paatadar

Overthead
88,820 r u t s A m o u n t

4.540
40,468units 2.195 Parteulars

8.295 By Cash
1,76,400
40,256units
To Process II
460 (460 unds9
Costing P&L
4.155
4382
4E0826

20225 460 8,295

Abnomal Loss:
Matenial Amount R) behre t s
(460 units x
13 648) Question 11 iougn Iwo processes2014
Labour whc passesdala rdales lo March,
(368 units x
6,278 08 product Gco-G
Overheads 72.195) Phana Limied produces Ainished
slock The okwng

(276 units x?4.382) 807.76 and

trans/emed to
Provess Fnhed St
completed Procss
1,209.42
Closing W.ILP: 8295 26 1.50,000 1,80,00 15000
Material
(1,200 units «13.648) Opening Stock
3.000 315.000
Labou (600 units x 2195) 16,377.60
Overheads 1,317.0 Dred malcrials 224.000 225.0
(480 units x R4.382)
2:103.36
Dret Wages 2 10.000 9000
Factory Overheads
74,000 90000 225.0
Finished Goods 19,797 96 165,000
Chsing Stock 30000
(39,500units x 20.225)
nckukrd n Openinystock
7,98,887.50 Iner pocessprot tansferred to process l on the transler pree
al 25 percen proflt
(c) Process lI Account I is al 20 percent
on Iransfer prike

Oulput of process I 5
rans/erred lo linIs.ned sock 5
vaived at the price
at which it
Partuculars Units Amount Particulars whereas output of process
valued at prime
cos FnIshed stock
Units Amount are 28. 00 000
Stock in processes lhe monlh s

rom process
ll Saes lor Stock Ac shewing the
is receved ll AAC, and Fnshed
To Opening WIP NIT By Normal Loss 40 3.780 Process-/ AC
Pocess

You are required to prepare

Input 42,000 5,04,000 Abnormal Loss 60 8,295 elemernl at each stage
profil
Direct Matenial 61,530 Finished Goods 39,500 7,98,877
Labour Solution:
88,820 Process-1AWc

Total Cost Prof

Overhead 1,76,400 Closing WIP
1,200 19,798 Total Cost
rofit Particukrs
R) )|R)
42,000 8,30,750 | 42,000 8,30,750 Particulars
By Transfer to 10 80 0008 10,000 2.70000
ToOpening
Balance

To Direct Material
150 000 150000
3.0000 300000
Process AC

lncha
The Institute of Chartered Accountants
Acounlants
o
of india CThe Inslitute of Chaltered
 928 ost Accounting

To Dret Wages 2.24 000 224.000

0,74.000 6,74,000
lss Ckosing Stock 74,000 74,000
Prime Cost 6,00.000 6.00 000
To Factory Overhead 2.10,000 2,10,00o
Total Cost 8,10,000 8,10,000
Profit 25% on 2,70,000 2.70,000
ransfer price ie.
33 on total cost
|10,80,000 8,10,000 2,70,000 10,80,000 8,10,000 2,70,000
Process-II Ac
Profit Particulars Total Cost Profit
Particulars Total Cost
) ) 15,15,000 7,35,000
To Opening By Transfer
1,80,000 1,50,000 30,000 Process to 22,50,000
II Ac
Stock
To Direct 3,15,000 3,15,000
Material
To Direct Wages 2,25,000 2,25,000
To Transfer from 10,80,000 8,10,000 2,70,000
Process 1A/c

Pine Cost 18,00,000 15,00,000 3,00,000

Less Closing 90,000 75,000 15,000|
Stock
17,10,000 14,25,000 2.85,000
To Factory 90,000 90,000
Overhead
Total Cost 18,00,000 15,15,000 2,85,000
Profit 20% on 4,50,000 4,50,000
transfer price i.e.
25% on cost
22,50,000 15,15,000 7,35,000 22,50,000 15.15.000 7,35.000

Profit element in clesing stock 3,00,00090.000

.

18,00,000
15,000

The Institute of Chartered Acconntants ofIndia

 Poro& Dpetaliay Cosing99

inistwd Stoek Ale

Tutat Cost
| ' a t ukars Prolt 'arteaulws
( (
(
Saes 2800000 16,48 500 1151500
yennu4,50 00 2,8S (001,05,000y
SANA
To Thanste wm2200018so 7,36000
27,00,000 18,00,000 0,00,000
CKosiy 2,25,000 1,51,500 73,500
ShxA
Total Cost ,75,000 16,48,500|8,20,500
3,25,00 3,25,000
alaix ang
ipuue)
28,00.000 1048,500 11,51,500| 28,00,00018,48,50011.51500
7,35,000 x2,25,000 73,500
Profit element in closing finished Stock
22,50,000
Calculation of Profit on Sale

Process Apprent Prolt Adkl: Uhwealised Less

Prolit in Openng Unieaised Profit
Actual Prolt

Stock in Closing Stock

(R) )
Process- 2,70,000 2,70,000
4,50,000 30,000 15,000 4,65,000
Process-
Finished Stock 3,25,000 1,65,000 73,500 4,16,500
10,45,000 1,95,000 88,500 11,51,500
 Question 13
The following details are available of Process X for August 2013:
(1) Opening work-in progress 8,000units
Degree of completion and cost
Material (100%) 763,900
Labour (60%) 10800
Overheads (60%) 75,400
(2 nput 1,82,000 unils al 7.56.900
Labour paid 7 328000
(4) | Over heads incured 7 164,000
(5) | Units scrapped 14.000
Degree of completon:
Material 100%
Labour and overhead S0%

The institute of Chartered Arceuntaats ofIndia

 Csting 3
9.32 Cost AccouMing
Process &Dperat
on
IRO0Lts

agredcrpa 100% Question 14 011 e r rasA

70% ardB aarg t e a
Aberia
proct psestraugi
o preses A u t h r Hman
tr Pe rarb8
Latr t onhexd wes B00 uts
r9pr
prace DC
aW mera Pr PS A PrKP

aorpbtadandtanseredtonext npraress
L.S80 n s weYe 400
1 s% ofa pt ndiny openg
wort
bss
S beadusedn dred matriala
Ooupu units

SSTpates 8prunto thal method ofinventory is

used
Normalloss1 o inp
assuming avarage
Yau are reuredo
conpute, Saap vabve p u () 24.0
12000
fguiaet producaon and Direct wages () 5.0
6,00
Cost per un Direct expenses ()
15 25
Solution:
Seläing price per uit ( as percentage
erperzes
af drect ages Seling w s pasd O
Production 17.400 were recoverad Rrxess A
Statement of Equivalent dthe o u t d
al overteads
These ae not aocated lolhe
processes 2
labour and Overhead Process Bms so
.002 wassokd Theertrecud
Material
baarce
Parbcuars
Unes Units ) Units tohenent pracessandtheAccounts
100 1,58,000 100 1,58,000 Prepare Process A and B
Produchon units compleled 1,58,000
15,200 Solution: Process- A Account
Normal Loss
Amourt
6% of(1,82,000+8.00) 18,000 70 12,600 Drus
18,000 100
AmountPartcuiars
Partculars Unit
Cosing WIP 1.91.200 1,76,000 1,70,600 400 800
1.200 100 1,200 8,000 12,0C0 By Normal Loss
1200 100 To Input
Less.AbnomalGain 1,69400 (5% of8.000units2) 1250
1,90,000 1,74.800 12,000 By Abnomal loss
100
Tolal To Direct Wages (100unvts 1250)
Statement of cost 62.500
5.000
Materials Labour Overhead To Direct Exp
6000 By Process- 8 Ac
Partculars 7500 uns }1250) 31250
10,800 5,400 5 800 By Profit and Loss Ac 2 500
63,900 To Overheads
Cpening WIP 7500 unts 1250)
input of Materials
7,56,900 (R 17,400x 8 000 95800
3,28,000 1,64,000 8.000 95 800
Expenses ,38,800 1,69,400
Tolal
8,20,800 95,800- 800
Cost per unit=.8,000units-400units
95.000z12 50
(15.200 x 78) 121,600 7,600units
Less: Saleof Scrap 6,99.200 3,30,800 1.69,400
Netcost 1,69,400 Process-B Account
Equivalent Units 1,74,800 1,69,400| Units Amourt
74.00 7 200 1.00 Unils Amourt Particulars
Cost PerUnit Particulars
500 5.000
62.500 By Normal Loss
Total costperunt =7(4+2*1)=7700 To Process- A AC
5.c00 (0% cf5.000units10

The lavitute of Cbaute rd Acrouutants of India

The Institute of ihaitered Accontants of India
 8 34 Cost Accountin
Proeess& y e i n n Elin9
By Finished Stock
24000 Profit Alc or 4.800 104 640
To Dret Wages & loss AWc
(4 800 units*t2180)
5,000
To Oret Expenses 11,600 Question 15 indamaton rekalng
n PK.S

foleeing
To Overheads ABX Conmpmy
lud provides the
un
17400 Opering
Work
inprogess 45.0000 u's 10 per
To Abnomal gan 300 6,540
L5,300 1,09,640 5,300 109640 )Units ntrducnd
the proxes5
ai) Expenses detiled to
65, H00
1,03, 100-75,000
Cost per uni= 5,000units-500 units
98,100=72180
4,500units
Direct materlal

Labour r1.60.700
Overtead 2% of inpa
Working Profit &Loss Alc
(v) Norma bss in the
process 1800 urts

Amount Amount Particulars

Amount Amount (Work in progress
Degree of complelion
Partculars 100%
Malenas 50%
By Sales: Labou 40%
|To Cost of Sales Process A Overhend 42.000 u r s
Process A 31,250
(2,500 units x T15) 37,500 (v) Finished output
abnomal loss
(2500 unds 1250) (vi) Degree of completion
of
100%
Process B
Process B (4,800 units x25)
1,20,000 1,57,500 Matenals B0%
(4.800unitsx2180) 1,04,640 135,890 Labour 60%
To Abnomal Loss:
By Abnomal gain Overhead urit.
sohi al 75 per
0malosS
were
3,540
1,050 Process B (vui) Jnits 5Tapped
as
unit
Process A
unts ol
atnormal o s s were sold at r2 per
100 unts(1250-2) (300 unitsx ix) All the
to prepare
(21.80-10) You a r e requred
of
Statement of equivalent
producthon a b n o r a l loss and closng balsrce
5,000 (a)
To Seling expenses the cost of
fnished goods,
Statement showing
To Net Profit 19, 100 (b)
work in progress
1.61.040 1,61,040 Process-B Account and Abnormal
Loss account

()
Note:
Solution
directly to
1. As mentioned selling expenses are not allocable to process which is debited Production
Statement of Equvalent
the PL AlC. (a) Equvalent Production
Overiead
2 kis assumed that Process A and Process B are not responsibrlity centres and hence, Labous
Process A and Process B have not been credited to direct sales. PIL A/C is prepared to input
Ostput Units Material
Details
Unils
Particular's Units Unirs Unia
arriving at profit/loss.
0420
Unt
1 50 nshed 4200 1o 4200 104200
Inodued

The Institute of Chatered

Accoutants of India
 9.36 Cost Accounting

Nvma e 00

(2%
4500)
Anvmw k 300 100 300 240 60 180
900 40 720
Ckring WP|1800 100 1,800
4500 45,000 44,100 43,140 42,900

() Statement of Cost

Units Rate () Amount () Amount(7)

Particulars 7,51,976.40
42,000 17.9042
(0Finished goods
() Abnormal Loss
300 11.5873 3,476.19
AMaterial
240 2.1048 505.15
Labour
758.18 4,739.52
Overhead 180 4.2121
() Closing W--P
1,800 11.5873 20,857.14
Material
900 2.1048 1,894.32
Labour
720 4.2121 3.03271 25,784.17
Overhead

Cost per Unit

Amount (R) Units Per Unit(
Particular
Direct Material
4,50,000
Unit Introduced

Add: Material 65.500

5,15,500
Less Value of normal loss
(900 units x 75) 4.500)
5.11,000 44,100 11.5873

90,800 43,140 2.1048

() Labour

() Overhead 180.700 42,900 42121

17.9042

e The lustitute of Chaitered Accountants ef lIndia

 osting 931
ProMessApetatint

(c) Proress B Ae
Uits Amount
Patitulars UritsAmen (
Partit ulars
000 A,
45,0004,50,000| y Normallo033 4,140
To Input loss 300
05,500 Dy Abriormal
ToDirect Matcrial 42,000 7,51,976
90,800 By Finished goods
To Labour 1,B0025,784
To Ovethead 1,80,700 By Closing WIP w

45,000 7,87,000 45,000 7,87,000

Abnormal Loss Wc
Particulars Units| Amount
Particular s Units Amount

4,740 By Cost ledger control ANc 300 600

To Process-B AVc 300
or Bank AVc
By Costing Profit & loss Nc 4.140
300 4,740 300 4,740