Question

The product of a manufacturing concern passes through two processes A and B and then to finished stock. It is ascertained that in each process normally 5% of the total weight is lost and 10% is scrap which from processes A and B realises Rs. 80 per tonne and Rs. 200 per tonne respectively.
The following are the figure relating to both the processes :

	Process A	Process B
Materials in tonnes	1,000	70
Cost of materials per tonne (in Rs.)	125	200
Wages (in Rs.)	28,000	10,000
Manufacturing expenses (in Rs.)	8,000	5,250
Output in tonnes	830	780

Prepare Process Accounts showing cost per tonnes of each process. There was no stock or work-progress in any process.

Answer 1

Books of..........

Dr.

Process - A Account

Cr.

Particulars	Quantity (Units)	Amount (Rs.)	Particulars	Quantity (Units)	Amount (Rs.)
To Materials	1,000	1,25,000	By Normal Loss	50	-
To Wages	-	28,000	By Scrap	100	8,000
To Mfg. Expenses	-	8,000	By Abnormal Loss	20	3,600
			By Process - B Alc (830 Tonnes x Rs. 180)	830	1,49,400
	1,000	1,61,000		1,000	1,61,000

Dr.

Process - B Account

Cr.

Particulars	Quantity (Units)	Amount (Rs.)	Particulars	Quantity (Units)	Amount (Rs.)
To Process-A Alc	830	1,49,400	By Normal Loss	45	-
To Materials	70	14,000	By Scrap	90	18,000
To Wages	-	10,000	By Finished Stock (780 Tonnes x Rs. 210)	780	1,63,800
To Mfg. Expenses	-	5,250
To Abnormal Gain	15	3,150
	915	1,81,800		915	1,81,800

Working Notes:
(1) Abnormal Loss-(Process-A):
`=("Rs." 1,61,000 - "Rs." 8,000)/(765  "Tonnes")xx 20 = "Rs." 3,600`
(2) Abnormal Gain - (Process-B) : `=("Rs."1,78,650 - "Rs." 18,000)/(765  "Tonnes")xx15 = "Rs." 3,150 `