Cost Accounting T.Y.B.Com.

(Semester – VI)
PROCESS COSTING
1. Y Ltd. manufactures a chemical product which passes through three processes. The cost records
shows the following particulars for the year ended 30th June, 2014.
Input to Process I 20,000 units @ ` 28 per unit
Particulars Process I Process II Process III
` ` `
Materials 48,620 1,08,259 1,03,345
Labour 32,865 84,553 77,180
Expenses 2,515 10,588 16,275
Normal Loss 20% 15% 10%
Scrap value per unit 1 2 3
Actual output (units) 18,000 16,000 15,000
Prepare Process Accounts, Abnormal Gain/Loss Account. Also show process cost per unit for
each process.

2. Product A is manufactured after it passes through three distinct processes. The following
information is obtained from the records of a company for the year ended 31st December, 2013.
Particulars Process I Process II Process III
` ` `
Direct material 2,500 2,000 3,000
Direct wages 2,000 3,000 4,000
Product overheads are ` 9,000. 1,000 units at ` 5 each were introduced to Process I. There was
no stock of materials or work in process at the beginning and at the end of the year. The output
of each process passes direct to the next process and finally to the Finished Stock Account.
Production overheads are recovered on 100% of direct wages. The following additional data is
available :
Particulars Output during Percentages of Value of scrap
the week normal loss to input per unit (`)
Process I 950 15% 3
Process II 840 10% 5
Process III 750 15% 5
Prepare Process Cost Accounts and Abnormal Gain or Loss Accounts for the year ended 31st
December, 2013.

3. Product X is obtained after it is processed through three distinct processes.

The following information is available for the month of March, 2014 :
Total Process A Process B Process C
Particulars ` ` ` `
Material Consumed 22,500 10,400 8,000 4,100
2 Process Costing

Direct Labour 29,320 9,000 14,720 5,600

Production Overhead 29,320 – – –
2,000 units at ` 4 per unit were introduced in Process A. Production overheads to be
distributed as 100% on direct labour. The actual output and normal loss of the respective
processes are :
Processes Output in Normal loss Value of Scrap
units on inputs per unit (`)
Process A 1800 10% 2.00
Process B 1360 20% 4.00
Process C 1080 25% 5.00
There is no stock of work in progress in any process. You are required to prepare Process
Accounts.

4. Savita Chemicals Ltd. is manufacturing a product which passes through three consecutive
processes, Process X, Process Y and Process Z. The following figures have been taken from its
books for the month ended 31st January, 2015.
Particulars Process X Process Y Process Z
Quantitative information :
Basic Raw Materials at ` 10 per kg 25,000 kgs. – –
Output during the month (kg) 24,000 23,200 22,250
Other additional information :
Process Materials (`) 1,50,000 2,70,000 3,50,000
Direct Wages 80% of Process 70% of Process 60% of Process
Materials Materials Materials
Indirect Materials (`) 10,000 8,000 2,000
Indirect Wages (`) 2,000 980 1,620
Machine Overheads (`) 10,000 8,000 12,000
Other Factory Overheads 80% of Direct 90% of Direct 75% of Direct
Wages Wages Wages
Normal Loss (% on input) 2% 4% 4%
Scrap Value per kg (`) 2 3 5
You are required to prepare Process Accounts.

5. Abad Chemicals Co. Ltd. produced three types of chemicals during the month of March, 204 by
three consecutive processes. In each process 2% of the total weight put in is lost and 10% is
scrap. Scrap of Process I and Process II realise ` 100 a ton and that of Process II ` 20 a ton. The
products of the processes are dealt with as follows :
Particulars Process I Process II Process III
Passed on the next process 75% 50% –
Sent to warehouse for sale 25% 50% 100%
Details of Cost : Raw Materials used (tonnes) 1,000 140 1,348
Details of Cost : Raw Materials used (`) 1,20,000 28,000 1,07,840
Process Costing 3

Direct Wages 20,500 18,520 25,000

General expenses 10,300 7,240 4,320
Prepare Process Cost Accounts showing cost per ton of each process.

6. M/s. XYZ & Co. Ltd. manufactures a product which passes through three processes. The
following particulars gathered for the month of March, 2016.
Particulars Process X Process Y Process Z
Basic Materials Introduced (kg.) 800 416 336
Cost of Basic Material per kg. (`) 96 90 35
Indirect Materials (`) 7,000 7,000 22,000
Direct expenses (`) 680 840 9,496
Wages (`) 15,360 15,200 4,400
Overheads (%) 50% of Wages 50% of Wages 50% of Wages
Normal loss (% of total input) 4% 5% 5%
Sales scrap value per kg. (`) – 6 –
Output transferred to next process (%) 50% 40% –
Output transferred to warehouse (%) 50% 60% 100%
Prepare Process Accounts.

7. Reliable Yarn Ltd. manufactures a yarn product. The product passes through three consecutive
processes. F.Y., S.Y. and T.Y. Relevant details for the month of March, 2014 are as under :
Particulars F.Y. Process S.Y. Process T.Y. Process
Quantitative information in kgs. :
Basic Input kg. @ ` 10 per kg. 2,000 – –
Output during the month 1,950 1,925 1,679
Stock of Process :
– On 1st March, 2014 200 300 100
– On 31st March, 2014 150 400 59
Percentage of Normal Loss to input in process 2% 5% 8%
Monetary Information ` ` `
Process Material 9,000 2,100 2,716
Wages 9,064 1,860 4,000
Value of Opening Stock 3,880 6,720 2,800
Scrap Value per kg. `1 `2 `4
Closing Stock is to be valued at the respective cost of each process.
Prepare Process Accounts, Process Stock Accounts, Abnormal Loss and Abnormal Gain
Account.
Find out the costing profit, when the sales of T.Y. process stock are made at ` 40 per kilogram.
4 Process Costing

8. Satyug Times Ltd. submits the following information in respect of its product which passes
through three consecutive processes viz. Ingestion Process, Digestion Process and Assimilation
Process, for the month ended 31st January, 2014.
Ingestion Digestion Assimilation
Process Process Process
Quantitative information (kgs.) :
Basic Raw Material @ ` 40 per kg 80,000 – –
Normal yield 80% 60% 50%
Output during the month 62,000 36,000 21,000
Stock of Process output :
31/12/2013 8,000 8,000 5,000
31/01/2014 10,000 4,000 4,000
Other Additional Information :
Process material ` 3,45,000 ` 8,26,000 ` 6,17,000
Labour man days 2,400 1,500 1,000
Labour rate per man day ` 80 ` 100 ` 150
Machine overheads 60% of Wages 50% of Process ` 2,34,000
material
Other manufacturing overheads ` 2,75,800 ` 1,63,000 ` 1,27,000
Value of opening stock per kg. ` 60 ` 140 ` 300
Scrap value per kg. ` 10 ` 15 ` 20
Finished stock of Assimilation process was sold at ` 350 per kg.
Prepare Process Accounts, Process Stock Account, Normal Loss Account and the Abnormal
Gain/Loss Account.

9. Particulars Process A (`) Process B (`) Process C (`)

Indirect Materials 1,00,000 18,750 16,550
Direct Wages 56,250 35,000 44,900
Direct Expenses 51,250 6,875 11,500
Value of Opening Stock per unit 25 31 40
Scrap value per unit 13.50 11.25 21.00
Units Units Units
Output 9,750 9,625 8,000
Stock of Process Output :
1/1/2013 1,500 1,375 2,000
31/12/2013 1,250 2,000 1,000
Percentage of wastage 2% 5% 10%
10,000 units of Direct Material were introduced in Process A at the rate of ` 5 per unit. The
percentage of wastage is computed on the number of units entering the process concerned.
From the above information of ‘DE’ Enterprise prepare : (i) Process Accounts; (ii) Process Stock
Accounts; (iii) Normal Loss Account; (iv) Abnormal Loss Account; (v) Abnormal Gain Account.
Value closing stock at the respective Process Cost.
Process Costing 5

10. The following details for the year ending 31st December, 2013 are available from the books of a
firm having three workshops and a wholesale warehouse.
Particulars Workshop A Workshop B Workshop C
Raw materials used (tonnes) 250 152 145
Cost per ton (`) 600 400 250
Direct wages (`) 4,29,000 1,01,250 52,800
Direct expenses (`) 69,000 69,350 11,250
Loss of tonne due to processing 4% 5% 2.5%
Proportion of Production transferred :
To workshop B at cost 20%
To workshop C at cost 50%
Proportion of production transferred :
To wholesale warehouse 80% 50% 100%
Wholesale warehouse :
Stock on 1/1/2013 at cost (`) 12,500 10,000 20,000
Stock on 31/12/2013 in tonne 10 20
Sales were ` 20,00,000, Salaries ` 2,00,000 and Administration expenses ` 1,00,000.
Prepare the respective Workshop Accounts showing the cost per tonne in each workshop and
an account showing the net profit of the firm for the year 2013. Closing stock in warehouse to
be valued at cost per ton in each workshop.

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