4. Wastage, sale of scrap, by-products etc are reordered on the credit side of the process account 5. The difference between debit and credit side shows the cost of production and output of that particular process which is transferred to the next process 6. The cost per unit in every process is calculated by dividing the net cost by the output. 7. The output of last process is transferred to the Finished Stock Account 8. Incomplete units at the end of the each period ion every process s converted in terms of completed units. Specimen of Process Account Process Account S52 Units Rs. Units Rs. To Direct materials By Loss in weight To Direct Wages (Normal To Direct Expenses Loss) To Indirect expenses By sale of Scrap To Other Expenses (if any) By Next Process Account(Transfer) Preparation of Process Accounts The preparation of Process Account depends upon the following situations 1. Simple Process Account 2. Process costing with normal process loss 3. Process costing with abnormal process loss 4. Process costing with abnormal process gains 5. Inter - process profits. Simple Process Account Under this case it is very easy to prepare process account. A separate account is opened for each process. All costs are debited to the process account. The total cost of the process is transferred to the next process. At the end of each process the cost per unit is obtained by dividing the total cost by the number of units. Illustration 1: Product A requires three distinct processes and after the third process the product is transferred to finished stock. Prepare various process accounts from the following information. Total P1 P2 Direct Materials 5000 4000 600 400 Direct Labour 4000 1500 1600 900 Direct Expenses 800 500 300 Production overheads 6000 P3 Production overheads to be allocated to different processes on the basis of 150% of direct wages. Production during the period was 200 units. Assume Shere is no opening or closing stock