SMART ACADEMY

SUB : COSTING , TOPIC : PROCESS COSTING

QN.01) Prepare process accounts and calculate total cost of production from the data given
below :

PARTICULAR PROCESS (X) PROCESS (Y) PROCESS (Z)

MATERIAL 2250 750 300
LABOUR 1200 3000 900
DIRECT EXPENSE
- FUEL 300 200 400
- CARRIAGE 200 300 100
WORK OVERHEAD 1890 2580 1875

THE INDIRECT EXPENSES RS. 1275 SHOULD BE APPORTIONED ON THE BASIS OF WAGES.

QN.02) The following information is given in respect of process A.

MATERIAL 1000 kg. @ Rs. 6 per kg.
Labour Rs. 5000
Direct expense Rs. 1000
Indirect expenses allocated to Process A Rs. 1000. Normal wastage of 10% of input.
Prepare Process A Account when :
A) Scrap value of normal loss nill.
B) Scrap arising out of normal has a sale value of Rs. 1 per unit.

QN.03) Fifty units are introduced into a process at a cost of rupee one each. The total
additional expenditure incurred in the Process is rs. 30. Of the units introduced, 10% are
normally spoiled in the course of manufacture, these possess a scrap value of Rs.. 0.25 each.
Owing to an accident , only 40 units are produced. You are required to prepare :-
(i) Process Account (ii) Abnormal loss account.

QN.04) Fifty units are introduced into a process at a cost of rupee one each. The total
additional expenditure incurred in the Process is rs. 30. Of the units introduced, 10% are
normally spoiled in the course of manufacture, these possess a scrap value of Rs.. 0.25 each.
Owing to an accident , only 47 units are produced. You are required to prepare :-
(i) Process Account (ii) Abnormal loss account.
SMART ACADEMY
SHOP NO33, SHREE NAGAR SHOPPING CENTER, BELOW MANGAL KARYALAY HALL,SHREE NAGAR,
WAGLE STATE, THANE – 400604.
7021610842 / 9594958607
 SMART ACADEMY
SUB : COSTING , TOPIC : PROCESS COSTING
QN.05) A product passes through three process A, B and C. the normal wastage of each
process is as follows: process A - 3 per cent, Process B – 5 percent, and process C – 8 percent.
Wastage of process A was sold at 0.25 paise. Per unit, that of process B at 0.50 paise per unit
and that of process C at 1.00 rupee per unit.
10,000 units were issued to process A on 01/04/2004 at a cost of Rs. 1 per unit. The other
costs were as follows :
PARTICULAR PROCESS A PROCESS B PROCESS C

Sundry material 1000 1500 500

Labour 5000 8000 6500
Direct expenses 1050 1188 2009
Actual output 9500 units 9100 unit 8100 units
Prepare the process Accounts, assuming that there were no opening or closing stock. Also
give the Abnormal Wastage and Abnormal gain Accounts.

QN.06) Chemical Ltd. Processes a patent material used in Buildings. The material is produced
in three concecutive grades – Soft, Medium, and Hard.
PARTICULAR PROCESS I PROCESS II PROCESS III
Raw material used 1000 Tonnes - -
Cost per tone Rs. 200
Manufacturing wages & expenses 87500 39500 10710
Weight lost (% of input of the process) 5% 10% 20%
Scrap (sale price Rs. 50 per tone) 50 tonnes 30 tonnes 51 tonnes
Sales price per tone Rs. 350 Rs. 500 Rs. 800

Management Expenses were 17500 and selling expenses Rs. 10000. Two third of the output
of process (I) and one half of the output of Process (II) are passedon to the next process and
the balances are sold. The entire Output of Process (III) is sold.
Prepare the three process accounts and a statement of profit. Make approximation , where
necessary.

SMART ACADEMY
SHOP NO33, SHREE NAGAR SHOPPING CENTER, BELOW MANGAL KARYALAY HALL,SHREE NAGAR,
WAGLE STATE, THANE – 400604.
7021610842 / 9594958607
 SMART ACADEMY
SUB : COSTING , TOPIC : PROCESS COSTING
QN.07) A product passess through thee processes – A,B and C. The details of expenses
incurred on the three processes during the year 2003 were as under :
PARTICULAR PROCESS A PROCESS B PROCESS C
Raw material used 10000 units - -
Cost per unit Rs. 100
Sundry material 10,000 15,000 5,000
Labour 30,000 80,000 65,000
Direct expenses 6,000 18,150 27,200
Selling price per unit of output Rs. 120 Rs. 165 Rs. 250

Management Expenses during the year were Rs.80000 and selling expenses were Rs. 50,000.
These are not allocable to the processes.
Actual output of the three process was : A – 9,300 units, B – 5,400 units, C – 2,100 units. Two
thirds (2/3) od the output od 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 processe, calculated on the unput of every process was :
Process A – 5%, B – 15% and C – 20%. The loss of the process A was sold at Rs. 2 per unit, that
of B at Rs. 5 per unit and process C at rs. 10 per unit.
Prepare the three Process Accounts and profit and loss Accounts.

QN.08) The product passes through two processes, A and B. A loss of 5% is allowed in process
A and 2% in process B, nothing being realized by disposal of the wastage.
During April 10,000 units of material costing rs. 6 each were introduced in the process A. the
other costs were as follows :

Particular Process A Process B

Meterial ………………………………………………………… - - - - - 6,140
Labour . . . . . .. . .. . .. . .. . . . .. . . .. . .. . . . .. . . .. . 10,000 6,000
Overheads, . . . . . .. . .. . . .. . . .. . . .. . .. . . .. . . . . . 6,000 4,600

The output was 9,300 units from process A. 9,200 units were produced by process B which
were transferred to warehouse. 8,000 units of the finished product were sold @ 15 per unit,
The selling and ddistribution expenses being Rs. 2 per unit

Prepare (i) process accounts (assuming there were no opening stock of any type.

SMART ACADEMY
SHOP NO33, SHREE NAGAR SHOPPING CENTER, BELOW MANGAL KARYALAY HALL,SHREE NAGAR,
WAGLE STATE, THANE – 400604.
7021610842 / 9594958607