Question

In a factory the product passes through two processes, A and B. A loss of 5% is etlowed in Process A and 2% in Process B, nothing being realised by disposal of wastage. 
During April 2018, 10,000 units of material costing~ 6/- per unit were introduced in process A. The other costs are as follows.

	Process A (Rs.)	Process B (Rs.)
Materials	-	6,140
Labour	10,000	6,000
Overheads	6,000	4,600

The output was 9,300 units from Process A. 9,200 units were produced by Process B, which were transferred to the finished stock. 
8,000 units of the finished product was sold at Rs 15/- per unit the selling and distribution expenses were Rs. 2/- per unit. 
Prepare (a) Process  Accounts, (b) Statement of Profit and Loss for the month April, 2018; assuming there were no opening stock of any type.

Answer 1

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

Dr.

Process - A Account

Cr.

Particulars	Quantity (Units)	Amount (Rs.)	Particulars	Quantity (Units)	Amount (Rs.)
To Units Introduced (10,000 x Rs. 6)	10,000	60,000	By Normal Loss (10,000 x 5/100)	500	-
To Labour	-	10,000	By Abnormal Loss-(Working Note-1)	200	1,600
To Overheads	-	6,ooo	By Process-B Alc	9,300	74,400
	10,000	76,000		10,000	76,000

Dr.

Process - B Account

Cr.

Particulars	Quantity (Units)	Amount (Rs.)	Particulars	Quantity (Units)	Amount (Rs.)
To Process - A Alc	9,300	74,400	By Normal Loss (9,300 x 2/100)	186	-
To Materials	-	6,140	By Finished Stock A/c	9,200	92,000
To Labour	-	6,000
To Overheads	-	4,600
To Abnormal Gain - (Working Note - 2)	86	860
	9,386	92,000		9,386	92,000

Particulars	Units	(Rs.)
Production during the Month	9,200	92,000
Less: Closing Stock of Finished Goods	1,200	12,000
	8,000	80,000
Add : Selling and Distribution Overheads (8,000 x Rs.2)	-	16,000
Cost of Sales	8,000	96,000
Add : Profit (8,000 x Rs. 3)	-	24,000
Sales Value (8,000 x ~ 15)	8,000	1,20,000

Working Notes:
(1) Abnormal Loss - (Process A): `=(76,000(-) "Nil")/(10,000(-)500)xx200` = Rs. 1,600
(2) Abnormal Gain - (Process B) : `(91,140)/(9,114)xx86` = Rs. 860