Question

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.

Answer 1

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