The following are the details in respect of Process X and Process Y of a manufacturing plant:

Particulars	Process X (₹)	Process Y (₹)
Materials	50,000	--
Labour	60,000	70,000
Overheads	20,000	50,000

The output of Process X is transferred to Process Y at a price calculated to give a profit of 15% on the transfer price, and the output of Process Y is charged to finished stock at a profit of 30% on the transfer price. The finished stock department realized ₹5,00,000 for the finished goods received from Process Y.

1. PREPARE process accounts.
2. CALCULATE total profit, assuming that there was no opening or closing work-in-progress.
3. ANALYZE the impact on profit if the labour cost in Process Y increases by 10%.
4. DETERMINE the new transfer price if the profit percentage for Process Y is increased to 35%.
5. DISCUSS the potential risks of increasing labour costs on overall profitability.