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Question - 1 Jeddah Company produces a consumer item Mashroob which passes through two departments. The company uses a process cost method. Cost data

Question - 1

Jeddah Company produces a consumer item " Mashroob" which passes through two departments. The

company uses a process cost method. Cost data of the company for the month of September is as under:

Depart. A Depart. B

Material 70,000 50,000

Labour 35,000 25,000

Factory overhead 35,000 25,000

There was no beginning inventories. Units started in process 50,000. Units in process September 30:

20,000 - 25% complete in Department A

10,000 - 50 % complete in Department B

Required:

a) Equivalent Production Unit b) Unit Cost at Depart 2,

c) Cost of Units transferred to Finished goods d) Cost of Work in Process at the end of June

Question - 2

The following given information have been obtained from the Cost accounts of a Factory producing a

commodity in the manufacture of which 3 processes are involved with the facts that:

(i) The operations in each separate process are completed daily.

(ii) The value of which units are to be charged to Process "B" and "C" is the cost per Unit of Process "A"

plus "B" respectively.

Process " A " " B " " C "

COST Rs. Rs. Rs.

Raw material used 144,000 --------- ---------

Direct Wages 38,400 72,000 175,500

Machine Expenses 21,600 18,000 21,600

Manufacturing overhead 12,000 13,500 14,400

UNITS

Production (gross) 37,000 ------ -----

Wastage(Normal Loss) 1,000 1,500 500

Inventory Jan. 1, 2005 -------- 4,000 16,500

Inventory Dec. 31, 2005 -------- 1,000 5,500

Required: Prepare Process Cost Accounts showing the cost of the output and the cost per unit at each

stage of manufacture.

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