Question

A product is obtained after passing it through three process. The following information is collected for March, 2018 :

Particulars	Process
	I	II	III
Direct Materials (Rs.)	10,400	7,920	11,848
Direct Wages (Rs.)	8,000	12,000	16,000
Output (Units)	1,900	1,680	1,500
Normal Loss	5%	10%	15%
Value of Scrap per Unit (Rs.)	8	16	20

Additional Information :
2,000 Units@ Rs. 12 was introduced in Process I. There was no stock of materials or W.l.P. at the beginning or at the end of that month. The Production Overhead was Rs. 36,000 for that month.
Prepare Process Accounts.

Answer 1

Dr.

Process I A/c

Cr.

Particulars	Units	(Rs.)	Particulars	Units	(Rs.)
To Units Introduced	2,000	12,000	By Normal Loss	100	400
To Direct Material	-	10,400	By Output transferred to Process II A/c (Rs. 20 Per Unit)	1,900	38,000
To Direct Wages		8,000
To Production Overheads (Based on wages)		8,000
Total(Rs.)	2,000	38,400	Total(Rs.)	2,000	38,400

Dr.

Process II A/c

Cr.

Particulars	Units	(Rs.)	Particulars	Units	(Rs.)
To Process I A/c	1,900	38,000	By Normal Loss	190	1,520
To Direct Material	-	7,920	By Abnormal Loss `((69,920-1520)/(1,900-190)xx30)`	30	1,200
To Direct Wages		12,000	By Output transferred to Process III A/c	1,680	67,200
To Production Overheads (Based on wages)		12,000
Total(Rs.)	1,900	69,920	Total(Rs.)	1,900	69,920

Dr.

Process III A/c

Cr.

Particulars	Units	(Rs.)	Particulars	Units	(Rs.)
To Process II A/c	1,680	67,200	By Normal Loss	252	2,520
To Direct Material	-	11,848	By Finished Stock (Rs. 152 Per Unit)	1,500	1,14,000
To Direct Wages		16,000
To Production Overheads (Based on wages)		16,000
To Abnormal Gain `((1,11,048-2520)/(1,680-252)xx72)`	72	5,472
Total(Rs.)	1,752	1,16,520	Total(Rs.)	1,752	1,16,520