The product of a company passes through three distinct processes to reach completion. They are A, B
Question:
The product of a company passes through three distinct processes to reach completion. They are A, B and C. From past experience it is ascertained that loss is incurred in each process as follows:
Process A—2%, process B—5%, process C—10%.
In each case, the percentage of loss is computed on the number of units entering the process concerned.
The loss of each process possesses a scrap value. The loss of processes A and B is sold at Rs 5 per 100 units and that of process C at Rs 20 per 100 units.
Process A (Rs) Process B (Rs) Process C (Rs)
Materials consumed 6,000 4,000 2,000 Direct labour 8,000 6,000 3,000 Manufacturing expenses 1,000 1,000 1,500 20,000 units have been issued to process A at a cost of Rs 10,000. The output of each process is as under process A—19,500 units; process B—18,800 units; and process C—16,000 units. There is no work-inprogress in any process. Prepare process accounts. Calculations should be made to the nearest rupee.
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