PROCESS COSTING

COMPREHENSIVES
Q.1. Product ‘V’ requires three distinct processes and after the third process the product is transferred
to the finished stock. Prepare various process accounts from the following information:
Costs Total (₹) Process Process Process
No. 1 No. 2 No. 3
Direct material 10,000 8,000 1,200 800
Direct labour 8,000 3,000 3,200 1,800
Direct expenses 1,600 1,000 600 -
Production overhead 12,000 - - -
Production overhead is to be allocated to different processes on the basis of 150% of direct
wages. Production during the period was 400 units but there is no opening and closing stock.
Prepare process accounts for all the three processes.

Q.2. Product X is obtained after it is processed through three distinct processes. The following cost
information is available for the operation:
Costs Total (₹) Process I Process II Process
III
Direct material 5,625 2,600 2,000 1,025
Direct labour 7,330 2,250 3,680 1,400
Production overhead 7,330 - - -
500 units @ ₹ 4 per unit were introduced in Process I. Production overheads are absorbed as a
percentage of direct wages. The actual output and normal loss of the respective processes are:
Output Units Normal loss Value of scrap
on input unit (₹)
Process I 450 10% 2
Process II 340 20% 4
Process III 270 25% 5
There is no stock of work-in-progress in any process, show: (i) The three process accounts
(ii) The abnormal loss and abnormal gain accounts.

Q.3. A producer of chemicals buys 500 litres of a chemical at ₹ 48 per litre in containers of 50 litres each.
Other expenses at the process were ₹ 38,760 including an abnormal loss of ₹ 10,000 due to an
accident. Normal waste at the process is 5%. Waste sells at ₹ 6 per litre and each empty container is
sold for ₹ 40. Generally 10% of containers were damaged so only 9 containers were in saleable
condition. Actual output was 480 litres.
Prepare Process A/c, Abnormal Gain/Loss A/c and Costing Profit and Loss statement.

CREDENT PROFESSIONAL STUDIES

Q.4. A product passes through three processes- A, B and C. The details of expenses incurred on the
three processes during the year were as under:
Process A B C
Units issued / introduced 10,000 - -
Cost per unit 100 - -
Sundry materials 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 120 165 250
Management expenses during the year were ₹ 80,000 and selling expenses were ₹ 50,000.
These are not allocated to the processes.
Actual output of the three processes was: A – 9,300 units, B – 5,400 units, and C – 2,100 units.
Two-thirds of the 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%, B- 15% and C- 20%. The normal loss in process A was sold at ₹ 2 per unit; that of B at ₹ 5
per unit and of process C at ₹ 10 per unit.
Prepare the three process accounts and the profit and loss account. (CA Inter Nov.1993)

Q.5. A product passes through three process: A, B and C 10,000 units at a cost of ₹ 1.10 were issued
to Process A. The other direct expenses were as follows: (in ₹)
Process A Process B Process C
Sundry Materials 1,500 1,500 1,500
Direct Labour 4,500 8,000 6,500
Direct Expense 1,000 1,000 1,503
The wastage of process A was 5% and in process B 4%. The wastage of process A was sold at
₹ 0.25 per unit, that of B at ₹ 0.50 per unit and that of C at ₹ 1.00 per unit. The overhead charges
were 160 % of direct labour. The final product was sold at ₹ 10 per unit fetching a profit of 20%
on sales. Prepare process accounts and also find out % of wastage in process C.

Q.6. In a manufacturing unit, raw material passes through four processes I, II, III & IV and the output
of each process is the input of the subsequent process. The losses in the four processes I, II, III
& IV are respectively 25%, 20%, 20% and 16-2/3% of the input. If the end-product at the end of
process IV is 40,000 kg. what is the quantity of the raw material required to be fed at the
beginning of process I and the cost of the same at ₹ 5 per kg.? Find out also the effect of
increase or decrease in the material cost of the end-product for variation of every rupee in the
cost of the raw material. (CA Inter. Nov.1984; May 1982)

Q.7. The input to a purifying process was 16,000 kgs. of basic material purchased @ ₹ 24 per kg.
Process wages amounted to ₹ 14,400 and overhead was applied @ 240% of the labour cost.
Indirect materials of negligible weight were introduced into the process at a cost ₹ 6,720. The
actual output from the process weighed 15,000 kgs. The normal yield of the process is 92%.
Any difference in weight between the input of basic material and output of purified material
(product) is sold @ ₹ 10 per kg. The process is operated under a licence which provides for the
payment of royalty @ ₹ 4 per kg. of the purified material produced.
Prepare: (i) Purifying process account (ii) Normal wastage account (iii) Abnormal wastage/Yield
account (iv) Royalty payable account. (CA Inter. May 1996)

CREDENT PROFESSIONAL STUDIES

Q.8. A product passes through two distinct processes before completion. Following information is
available in this respect:
Process-1 Process-2
Raw materials used 10,000 units -
Raw material cost (per unit) ` 75 -
Transfer to next process/Finished good 9,000 units 8,200 units
Normal loss (on inputs) 5% 10%
Direct wages ` 3,00,000 ` 5,60,000
Direct expenses 50% of direct wages 65% of direct wages
Manufacturing overheads 25% of direct wages 15% of direct wages
Realisable value of scrap (per unit) ` 13.50 ` 145
8,000 units of finished goods were sold at a profit of 15% on cost. There was no opening and
closing stock of work-in-progress.
Prepare:
(i) Process-1 and Process-2 Account
(ii) Finished goods Account
(iii) Normal Loss Account
(iv) Abnormal Loss Account
(v) Abnormal Gain Account. (CA Inter. Nov.2019)

Q.9. The product of a manufacturing unit passes through two distinct processes. From past experience
the incidence of wastage is ascertained as under: Process A: 2 per cent, Process B: 10 per cent.
In each case the percentage of wastage is computed on the number of units entering the process
concerned. The sales realisation of wastage in processes A and B are ₹ 25 per 100 units and
₹ 50 per 100 units respectively. The following information is obtained for the month of April
2020: 40,000 units of crude material were introduced in process A at a cost of ₹ 16,000.
Process A (₹) Process B (₹)
Other material 16,000 5,000
Direct labour 9,000 8,000
Direct Expenses 8,200 1,500
Output Units 39,000 36,500
Finished product stock :April 1 6,000 5,000
April 30 5,000 8,000
st
Value of stock per unit on April 1 ₹ 1.20 ₹ 1.60
Stocks are valued and transferred to subsequent process at weighted average costs. Prepare
respective process accounts and stock accounts.

Q.10. In process I 1,000 units were introduced in January. 200 units, which are 40% complete in all
respect, remained as Closing Work- in- Progress at the end of the month. Compute the
equivalent Production and obtain the cost of Closing Work- in- Progress if total process costs
during the period are ₹ 17,600.

Q.11. A company within the food industry mixes produced ingredients in two different processes to
produce one product. The output of Process 1 becomes the input of Process 2 and the output of
process 2 is transferred to the packing department.
From the information given below, you are required to open accounts for Process 1, Process 2,
abnormal loss and packing department for a particular week:

CREDENT PROFESSIONAL STUDIES

 Process 1: Input:
Material A 6,000 kilograms at 50 paise per kilogram
Material B 4,000 kilograms at ₹ 1 per kilogram
Mixing labour 430 hours at ₹ 2 per hour
Normal loss 5% of weight of input, disposed of at 16 paise per kilogram
Output 9,200 kilograms.
No work-in-process at the beginning or end of the week.
Process 2: Input:
Material C 6,600 kilograms at ₹ 1.25 per kilogram
Material D 4,200 kilograms at ₹ 0.75 per kilogram
Flavouring essence ₹ 300
Mixing labour 370 hours at ₹ 2 per hour
Normal loss 5% of weight of input with no disposed value
Output 18,000 kilograms.
No work-in-process at the beginning of the week but 1,000 kilograms is in process at the end of
the week and estimated to be only 50% complete as far as labour and overhead were concerned.
Overhead of ₹ 3,200 incurred by the two processes is to be absorbed on the basis of mixing
labour hours.

Q.12. The following data are available in respect of process I for February, 2020:
(1) Opening stock of work in process: 800 units at a total cost of ₹ 4,000.
(2) Degree of completion of opening WIP: Materials 100%, Labour 60% and overheads 60%.
(3) Input of materials at a total cost of ₹ 36,800 for 9,200 units.
(4) Direct wages incurred ₹ 16,740.
(5) Production overhead ₹ 8,370.(6) Units scrapped 1,200 units. The stage of completion of
these units was: Material- 100%, Labour- 80% and overheads- 80%.
(7) Closing work in process: 900 units. The stage of completion of these units was: Material-
100%, Labour- 70% and Overheads- 70%.
(8) 7,900 units were completed and transferred to the next process.
(9) Normal loss is 8% of the total input (opening stock plus units put in).
(10) Scrap value is ₹ 4 per unit.
You are required to:
(a) Compute equivalent production.
(b) Calculate the cost per equivalent unit for each element.
(c) Calculate the cost of abnormal loss (or gain), closing work –in-progress and the units
transferred to the next process using the FIFO method. (d) Show the process account for
February, 2008.
If the above statements are prepared under average cost method, do you need any more details?
(CA Inter May1990; May 1998)
Q.13. The following data pertain to Process No.1 for March, 2020 of Kanishka Ltd.:
Opening work-in progress 1,500 units at ₹ 15,000. Degree of completion : Material 100% :
Labour and overhead 33-1/3%, Input of materials 18,500 units at ₹ 52,000, Direct labour
₹ 14,000, overheads ₹ 28,000.
Closing work-in-progress 5,000 units. Degree of completion: Materials 90% and labour and
overheads 30%.
Normal process loss is 10% of total units (opening + units put in). Scrap value ₹ 2 per unit.
Units transferred to the next process 15,000 units.

CREDENT PROFESSIONAL STUDIES

 You are required to:
(a) Compute equivalent units of production.
(b) Compute per equivalent units for each cost element, i.e., materials, labour and overheads.
(c) Compute the cost of finished output and closing work-in-progress.
(d) Prepare the process and other accounts.
Assume FIFO method.

Q.14. The following data are available in respect of process 3 for the month of April:
Direct material added in process ₹ 776
Direct labour 386
Production overhead 768
Transfer from process 2 4,200 units valued at ₹ 1,560
Transfer to process 4 3,650 units
st
Stock at 1 April 600 units valued at ₹ 390
Degree of completion : Material added in process 60%
Labour 50%
Overhead 40%

Stock on 30th April : 800 units.

Degree of completion : Material added in process 80%
Labour 70%
Overhead 60%
Units scrapped : 350 units.
Degree of completion : Material added in process 100%
Labour 80%
Overhead 80%
Normal loss is 10% of throughput. All units scrapped can be sold for Re.0.10 per unit. You are
required to prepare: (a) A statement showing the cost per unit of production and the value of the
output; (b) An account for process 3; (c) An abnormal loss or abnormal gain account.

Q.15. From the following information for the month of October 2019, prepare process III cost account:
Opening WIP in process III 1,800 units at ₹ 27,000
Transfer from process II 47,700 units at ₹ 5,36,625
Transferred to warehouse 43,200 units
Closing WIP of process III 4,500 units
Units scrapped 1,800 units
Direct material added in process III ₹ 1,77,840
Direct wages ₹ 87,840
Production overheads ₹ 43,920
Degree of completion:
Opening Stock Closing Stock Scrap
Material 80% 70% 100%
Labour 60% 50% 70%
Overheads 60% 50% 70%
The normal loss in the process was 5% of the production and scrap was sold @ ₹ 6.75 per unit.
(CA Inter. Nov.2003)

CREDENT PROFESSIONAL STUDIES

Q.16. Following information is available regarding process A for the month of February 2021:
Production Record
Units in process as procured on 1st Feb.2021 4,000
(All material used, 25% complete for labour and overhead)
New units started in process 16,000
Units completed 14,000
Units in process 28th Feb.2021 (All material used,33 1/3% complete for labour and 6,000
overhead)
Cost Record
Work-in-progress as on 1st Feb, 2021: Material ₹ 6,000
Labour 1,000
Overhead 1,000
8,000
Cost during the month: Material ₹
Labour 25,600
Overhead 15,000
15,000
55,600
Presuming that average method of inventory is used, prepare:
Statement of equivalent production, Statement showing cost for each element, Statement of
apportionment of cost, Process cost account for process A. (C.A. PE II May 1999)

Q.17. Data relating to process ‘A’ of a company during the month of April, 2021 is given below :
Opening WIP (1,000 units) : Material ₹ 40,000
Labour ₹ 7,500
Overheads ₹ 22,500
Material introduced in process ‘A’ (19,000 units) ₹ 7,40,000
Direct labour ₹ 1,79,500
Overheads ₹ 5,38,500
Units scrapped : 1,500 units
Degree of completion : material :100%,
labour and overheads : 80%
Closing work-in-progress : 1,000 units
Degree of completion : material :100%,
labour and overheads : 80%
Units finished and transferred to process ‘B’ 17,500 units
Normal loss : 5% of total input including opening
W.I.P. Scrapped units fetch ₹ 20 per piece
Required: (a) Statement of equivalent production.(b) Statement of cost.(c) Statement of
distribution of cost. (d) Process ‘A’ Account and other Accounts.

Q.18. A Company produces a component which passes through two processes.

During a month, materials for 40,000 components were put into Process I of which 30,000 were
completed and transferred to Process II. Those not transferred to process II were 100% complete
as to material cost and 50% complete as to labour and overheads cost. The process I costs
incurred were as follow:
Direct Materials ₹ 15,000
Direct Wages ₹ 18,000

CREDENT PROFESSIONAL STUDIES

 Factory Overhead ₹ 12,000
Of those transferred to process II, 28,000 units were completed and transferred to finished goods
stores. There was a normal loss with no salvage value of 200 units in process II there were 1,800
units, remained unfinished in the process with 100% complete as to materials and 25% complete
as regard to wages and overhead.
No further process material costs occur after introduction at the first process until the end of the
second process, when protective packing is applied to the completed components.
The process and packing costs incurred at the end of the process II were.
Packing material ₹ 4000
Direct Wages ₹ 3500
Factory Overheads ₹ 4500
Required:
(i) Prepare Statement of Equivalent Production, cost per unit and process I A/c.
(ii) Prepare Statement of Equivalent Production, cost per unit and process II A/c.

Q.19. A Chemical Company carries on production in two processes. The materials first pass through
Process I, where Product ‘A’ is produced. Following data are given for the month just ended:
Material input quantity 2,00,000 kgs
Opening work in progress quantity (Material 100% and
conversion 50% complete) 40,000 kgs
Work completed quantity 1,60,000 kgs
Closing work in progress quantity (Material 100% and
conversion 2/3rd complete) 30,000 kgs
Material input cost ₹ 75,000
Processing cost ₹ 1,02,000
Opening WIP cost
Material cost ₹ 20,000
Processing cost ₹ 12,000
Normal process loss in quantity may be assumed to be 20% of material input. It has no realizable
value. Any quantity of product ‘A’ can be sold for ₹ 1.60 per kg.
Alternatively, it can be transferred to process II for further processing and then sold as
product ‘AX’ for ₹ 2 per kg. Further materials are added in process II, which yield two kgs of
product ‘AX’ for every kg of product ‘A’ of process I.
Of the 1,60,000 kgs per month of work completed in Process I, 40,000 kgs are sold as
product ‘A’ and 1,20,000 kgs are passed through process II for sale as product ‘AX’. Process II
has facilities to handle up to 1,60,000 kgs of Product ‘A’ per month, if required.
The monthly costs incurred in Process II (other than the cost of Product ‘A’) are:
1,20,000 kgs of 1,60,000 kgs of
Product ‘A’ input Product ‘A’ input
Material cost ₹ 1,32,000 ₹ 1,76,000
Processing costs ₹ 1,20,000 ₹ 1,40,000
Required:
1. Determine, using the weighted average cost, the cost per kg of Product ‘A’ in Process I and
value of both work completed and closing work in progress for the month ended.
2. Is it worthwhile processing 1,20,000 kgs of product ‘A’ further?
3. Calculate the minimum acceptable selling price per kg, if a potential buyer could be found
for additional output of product ‘AX’ that could be produced with the remaining Product ‘A’
quantity.

CREDENT PROFESSIONAL STUDIES

Q.20. A Limited produces a product which passes through two processes before it is completed and
transferred to finished stock. The following data relate to September, 2019:
Particulars Process Finished
I (₹ ) II (₹ ) Stock (₹ )
Opening stock 3,000 3,600 9,000
Direct materials 6,000 6,300
Direct wages 4,480 4,500
Factory overheads 4,200 1,800
Closing stock 1,480 1,800 4,500
Inter-process profit included in opening stock 600 3,300
Output of process I is transferred to process II at 25% profit on the transfer price and output of
process II is transferred to finished stock at 20% profit on the transfer price. Stocks in process
are valued at prime cost. Finished stocks are valued at the price at which it is received from
process II. Sales during the period were ₹ 56,000.
Required: Prepare process cost accounts and finished stock account showing the profit element
at each stage. (C.A. Inter Nov.1990; May 2010, May 2019)

EXHIBITS FOR PRACTICE

Q.21. From the following particulars, prepare Process account and calculate abnormal loss and thereby
also show the entries to be passed in abnormal loss account:
Input of Raw materials 1,200 units at ₹ 6 per unit. Direct labour ₹ 4,800 and Factory Expenses
₹ 5,610. Scrap value of normal loss is sold at ₹ 0.50 per unit.
Net Production 1,060 units and Normal loss in the process is 10% of input.

Q.22. From the following information given to you, prepare a process Z account: 2,000 units are
transferred to process Z @ ₹ 4 per unit. Other cost details relating to the process are as follows:
Material ₹ 4,000, Labour ₹ 1,000, proportionate share of overhead for the process ₹ 700. The
normal loss has been estimated @ 10% of the process input. Units representing normal loss can
be sold @ ₹ 1 per unit. Actual production in the process is 1,900 units. Output of process Z is
transferred to finished stock account.

Q.23. In the above Q.24. Prepare process account assuming that actual production is 1,700 units.

Q.24. The finished product of a manufacturing company passes through three processes I, II and III.
The normal wastage in each process is 5%, 7% and 10% for the processes respectively
(calculated with reference to the number of units fed into each process). The scrap generated out
of wastage has a sale value of 70 paise per unit, 80 paise per unit and Re.1 per unit in the process
I, II and III respectively. The details of cost of data for the month are given below:
Processes
I II III
Material used (₹) 1,20,000 40,000 40,000
Direct labour cost (₹) 80,000 60,000 60,000
Production expenses (₹) 40,000 40,000 28,000
Output in units (actual) 38,000 34,600 32,000
Process I was fed with 40,000 units for raw input at cost of ₹ 3,20,000. Prepare the process
Account. (ICMAI Inter, June1996; C.S. Inter, Dec.1987)

CREDENT PROFESSIONAL STUDIES

Q.25. A product passes through two processes. The output of Process I becomes the input of Process II
and the output of Process II is transferred to warehouse. The quantity of raw materials introduced
into Process I is 20,000 kg at `10 per kg. The cost and output data for the month are as under:
Process-1 Process-2
Direct Materials ` 60,000 ` 40,000
Direct Labour ` 40,000 ` 30,000
Production overheads ` 39,000 ` 40,250
Normal Loss 8% 5%
Output 18,000 17,400
Loss realization `/ Unit 2.00 3.00
The company’s policy is to fix the selling price of the end product in such a way as to yield a Profit
of 20% on Selling price. Required:
(i) Prepare the Process Accounts
(ii) Determine the selling Price per unit of the end product. (CA Inter. Nov. 2002)

Q.26. Alpha Ltd. is engaged in the production of a product A which passes through 3 different processes -
Process P, Process Q and Process R. The following data relating to cost and output is obtained from
the books of accounts for the month of April 2021:
Particulars Process P Process Q Process R
Direct Material 38,000 42,500 42,880
Direct Labour 30,000 40,000 50,000
Production overheads of ` 90,000 were recovered as percentage of direct labour.
10,000 kg of raw material @ ` 5 per kg. was issued to Process P. There was no stock of materials or
work in process. The entire output of each process passes directly to the next process and finally to
warehouse. There is normal wastage, in processing, of 10%. The scrap value of wastage is ` 1 per
kg. The output of each process transferred to next process and finally to warehouse are as under:
Process P = 9,000 kg
Process Q = 8,200 kg
Process R = 7,300 kg
The company fixes selling price of the end product in such a way so as to yield a profit of 25% on
selling price.
Prepare Process P, Q and R accounts. Also calculate selling price per unit of end product.
(CA Inter. May 2018)
Q.27. Prepare a statement of equivalent production cost statement, statement of valuation and process
account from the following particulars using FIFO method:
(a) Opening work-in-progress – 900 units at ₹ 4,500.
Degree of completion: Material- 100%; Labour and Overheads- 60%.
(b) Input of materials- 9,100 units at ₹ 27,300.
Expenses: Labour- ₹ 12,300; Overheads- ₹ 8,200.
(c) Units scrapped- 1,200 units.
Degree of completion: Material 100%; Labour and Overheads- 70%.
(d) Closing work-in-progress- 1,000 units.
Degree of completion: Material 100%; Labour and Overheads- 80%.
(e) Finished units transferred to next process- 7,800.
Normal scrap- 10% of input: scrap sold @ ₹ 3.
If the above statements are prepared under average cost method, do you need any more details?
(CA Inter May 1990; May 1984)

CREDENT PROFESSIONAL STUDIES

Q.28. From the following information for May relating to SV company Ltd., prepare Process cost
accounts for process III :
Opening Stock in process III 1,000 units at ₹ 14,400
Transfer from process II 42,600 units at ₹ 3,30,800
Direct materials added in process III ₹ 1,60,720
Direct wages ₹ 79,240
Production overhead ₹ 39,620
Units scrapped 2,200 units
Transferred to process IV 37,800 units
Closing stock 3,600 units
Degree of completion:
Opening stock Closing stock Scrap
Material 70% 80% 100%
Labour 50% 60% 80%
Overhead 50% 60% 80%
There was a normal loss of 5% production and units scraped were sold at ₹ 3 each.

Q.29. The following information is available in respect of process 2 for March, 2021. Prepare the
process account using weighted average cost method.
Opening Stock 1000 units. Valued by: Direct Material 1 ₹ 4,000 & Material 2 ₹ 2,000;
Labour ₹ 350 and Overhead ₹ 800.
Transfer from Process 1: 16,000 units of ₹ 81,000.
Transfer to Process 3: 14,500 units
Material added to Process 2: ₹ 43,750; Labour ₹14,300 & Overhead absorbed ₹ 28,500.
Scrapped: 500 units; Degree of Completion: Material 100% , Labour 60% and Overhead 20%.
Normal loss was estimated at 5% of production units realising ₹ 5 per unit.
Closing Stock: 2,000 units
Degree of completion: Material 50%, Labour 20% and Overhead 20%.

Q.30. The following information is given in respect of Process No. 3 for the month of January, 2021.
Opening Stock- 2,000 units made-up of:
Direct Materials-I ₹ 12,350
Direct Materials-II ₹ 13,200
Direct Labour ₹ 17,500
Overheads ₹ 11,000
Transferred from Process No2: 20,000 units @ ₹ 6.00 per unit.
Transferred to Process No 4: 17,000 units.
Expenditure incurred in process No 3:
Direct Materials ₹ 30,000
Direct Labour ₹ 60,000
Overheads ₹ 60,000
Scrap 1,000 units- Direct Materials 100%, Direct Labour 60%, and Overheads 40%.
Normal Loss 10% of production.
Scrapped units realised ₹ 4 per unit.
Closing stock: 4,000 units-Degree of completion: Direct materials 80%, direct labour 60%,
Overheads 40%. Prepare process 3 account using average price method. (C.A. Inter May 2001)

CREDENT PROFESSIONAL STUDIES

Q.31. A product passes through three processes ‘X’, ‘Y’, ‘Z’. The output of process ‘X’ and ‘Y’ is
transferred to next Process at cost plus 20% each on transfer price and the output of Process Z is
transferred to finished stock at a profit of 25% on transfer price.
The following information is available in respect of the year ending 31st March:
Particulars Process X ProcessY Process Z Finished
(₹) (₹) (₹) Stock (₹)
Opening Stock 15,000 27,000 40,000 45,000
Material Stock 80,000 65,000 50,000 -
Wages 1,25,000 1,08,000 92,000 -
Manufacturing Overheads 96,000 72,000 66,500 -
Closing Stock 20,000 32,000 39,000 50,000
Inter-Process Profit included in
Opening Stock NIL 4,000 10,000 20,000
Stock in Process is valued at Prime Cost. Finished stock is valued at the price at which it is
received from process ‘Z’. Sales of the finished Stock during the period was ₹ 14,00,000.
Required:
Prepare Process Accounts and Finished Stock Account showing profit element at each stage.
(C.A. Inter May 2017)

Ans. of Exhibits:
Q.21. Cost of Abnormal loss ₹ 325 and Tr. To Costing P & L ₹ 315.
Q.22. Value of Abnormal gain ₹ 750 and Tr. To Costing P & L ₹ 650.
Q.23. Cost of Abnormal Loss ₹ 750.
Q.24. Abnormal loss in process II: 740 units costing ₹ 14,584; Abn.Gain in Process III 860 units ₹ 22,272
Q.25. Process I: Abnormal loss 400 units @ 18.25; Tr. to Process II 18,000 units @ 18.25,
Process II: Abnormal gain 3000 units @ 25.50; Tr. to Finished Stock 17,400 units @ 25.5.
Selling Price per unit of end product - ` 31.875.
Q.26. Process P: Tr. to Process Q: 9,000 units @ ` 15.50, Process Q: Abnormal gain 100 kgs @ 31; Tr. to
Process R 8,200 Kgs @ ` 31; Process R: Abnormal loss 80Kgs @ ` 52 and Finished Goods 3,79,600.
Selling Price per unit of end product - ` 69.33.
Q.27. Cost per Equ.Unit: ₹ 3, 1.5, 1 for Mat., Labour and Oh. Abn. Loss ₹ 950 & Cl. Stock ₹ 5,000.
Q.28. Cost per Equ.Unit: ₹ 8, 4, 2 and 1 for Material A, Material B, Wages and Overhead. Normal loss
2000 units. Abnormal loss 200 units at ₹ 2,880 & Closing Stock ₹ 46,800.
Q.29. Cost per Equ.Unit: ₹ 5, 3, 1 and 2 for Mat.1, Mat.2, Labour and Overhead. Normal loss 750 units.
Abnormal gain 250 units at ₹ 2,750 & Closing Stock ₹ 14,200.
Q.30. Cost per unit; 6.19, 2.22, 4.16, 4 for Mat..1, Mat..2, labour and Overhead. Abnormal gain 800 unit at
₹ 3,262 and closing stock ₹ 48,290
Q.31.
Cost Profit Total
Process X 2,96,000 74,000 3,70,000
Process Y 5,36,379 2,26,121 7,62,500
Process Z 7,45,629 5,50371 12,96,000
Finished Goods 7,41,862 6,58,138 14,00,000

CREDENT PROFESSIONAL STUDIES