Intermediate: Preparation of process and by-product accounts

(a) A chemical, Exalete, passes through processes A and B before completion. In process B, a by-product, Exaletent, JS produced which, after further processing in process C, JS sold at a profit of 162!3% of selling price.

You are required. from the data given for the month of April, to prepare accounts for:

(i) processes A, B, and C;

(ii) abnormal loss;

(iii) abnormal gain.

Production overhead for the month, £72000, is absorbed by a labour hour rate.

(b) Define and explain briefty the accounting treatment of;
(i) by-products;
(ii) joint products

Transcribed Image Text:

Process A B C Output (units) 4200 3800 100 Normal loss in process (% of input) 20 5 | () () () Scrap value of any loss in process, per unit 1.5 5 Costs: Direct materials introduced (5000 units) 30000 Direct materials added 10000 3100 100 Direct wages incurred at 3 per hour 12000 14700 Direct expenses 7500 1170 - 1881 300