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aterials at Rs.5 per kg were issued to the first process. Direct wages amounted to Rs.900 and roduction overhead incurred was Rs.500. Normal loss is
aterials at Rs.5 per kg were issued to the first process. Direct wages amounted to Rs.900 and roduction overhead incurred was Rs.500. Normal loss is estimated at 10% of input. This wastage sold at Rs.3 per kg. The actual output is 1850 kg. Prepare process I A/c and Abnormal Gain/ abnormal loss A/c as the case may be. Kg Rs To Materials To Direct wages To Production OH To Abnormal gain (Bal.) Process I Account Kg Rs. 2000 10000 By Normal loss (Sale of 900 scrap) 500 By Process II - transfer 50 300 2050 11700 200 1850 600 111002 2050 11700 53 Kg Rs. Abnormal Gain Alc Kg Rs. To Normal loss (loss of 50 150 By Process I A/C income) 150 To Costing P&L A/c (Bal.) 50 300 50 300 50 300 Working note: (200+1850)-2000=50 (100004900+500)-600 = Rs.6 1850-50 1850x6=11100 50x6=30 llustration 6: The product of a company passes through three distinct processes to completion B and C. from the past experience it s ascertained that loss incurred in each process as - A-2%, -5% and C-10%. In each case the percentage of loss is computed on te number of units entering the process oncerned. The loss of each process possesses a scrap value. The los of processes A and B sold at s. 5 per 100 units and that of C at Rs.20 per 100 units. The output of each process passes immediately to the next process and the finished units are assed from process C into stock. Process A Process B Process C Materials consumed 6000 4000 2000 Direct labour 8000 6000 3000 Manufacturing expenses 1000 1000 1500 20000 units have been issued to process A at a cost of Rs.10000, the output of each process as been as under: A-19500, B- 18800 and C - 16000 here is no work in progress in any process. Prepare process accounts. Calculations should be made the nearest rupee
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