Product 'X' is obtained after it is processed through Process A, B and C. The following cost information is available for the month ended 31.03.2018 :
| Particulars | A | B | C |
| No. of Units introduced in the Process | 500 | - | - |
| Rate per Unit of Units Introduced (Rs.) | 04 | - | - |
| Cost of Material | 2,600 | 2,000 | 1,025 |
| Direct Wages | 2,250 | 3,680 | 1,400 |
| Production Overheads | 2,250 | 3,680 | 1,400 |
| Normal Loss | 10% | 20% | 25% |
| Value of Scrap per Unit | 02 | 04 | 05 |
| Output in Units | 450 | 340 | 270 |
There is no Stock in any Process.
You are required to prepare (1) Process B A/c, (2) Abnormal Loss A/c, (3) Abnormal Gain A/c.
Advertisement Remove all ads
Solution
| Dr. | Process B A/c | Cr. |
| particulars | Units | (Rs.) | particulars | Units | (Rs.) |
| To process A A/c | 450 | 9,000 | By Normal Loss | 90 | 360 |
| To Material | 2,000 | By Abnormal Loss | 20 | 1,000 | |
| To Direct Wages | 3,680 | By Process C A/c (Cost per Unit Rs.50) (Working Note No. 1) | 340 | 17,000 | |
| To Production Overheads | 3,680 | ||||
| Total(Rs.) | 450 | 18,360 | Total(Rs.) | 450 | 18,360 |
| Dr. | Abnormal Loss A/c | Cr. |
| Particulars | Units | (Rs.) | Particulars | Units | (Rs.) |
| To Process Y A/c | 20 | 1,000 | By Bank A/c | 20 | 80 |
| By Profit and Loss A/c | - | 920 | |||
| Total(Rs.) | 20 | 1,000 | Total(Rs.) | 20 | 1,000 |
| Dr. | Abnormal Gain A/c | Cr. |
| Particulars | Units | (Rs.) | Particulars | Units | (Rs.) |
| To Normal Loss | 15 | 75 | By Process C A/c | 15 | 1,200 |
| To Profit and Loss Ale | - | 1,125 | |||
| Total(Rs.) | 15 | 1,200 | Total(Rs.) | 15 | 1,200 |
Working Note No. 1 :
`"Cost per Unit"="Cost Incurred(-) Scrap Value of Normal Loss"/"Input(-) Normal -Loss"`
`=(18,360(-)360)/(450(-)90)`
`=(18,000)/(360)=` Rs. 50
Concept: Process Loss - Abnormal Loss and Abnormal Gain
Is there an error in this question or solution?
Advertisement Remove all ads
Advertisement Remove all ads
