Scribd
Upload
128 views13 pages

Process Costing : Prof. Birenjan Digal

This document provides three examples of process costing. The examples show how to: 1) Prepare process accounts from input and output data for three processes. 2) Prepare a process account when there is normal loss, showing the account with and without a scrap value. 3) Prepare process cost accounts and abnormal gain/loss accounts from input/output and production data over a week for three processes. Process accounts show material, labor, overhead and normal loss/transfer to next process, while gain/loss accounts calculate abnormal amounts.

Uploaded by

Kushal Gupta
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
128 views13 pages

Process Costing : Prof. Birenjan Digal

This document provides three examples of process costing. The examples show how to: 1) Prepare process accounts from input and output data for three processes. 2) Prepare a process account when there is normal loss, showing the account with and without a scrap value. 3) Prepare process cost accounts and abnormal gain/loss accounts from input/output and production data over a week for three processes. Process accounts show material, labor, overhead and normal loss/transfer to next process, while gain/loss accounts calculate abnormal amounts.

Uploaded by

Kushal Gupta
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 13

Process Costing…

Prepare By

Prof. Birenjan Digal


M.Com, M.B.A, M.Phil, ICWAI, (CS)
E.g.1: Prepare Process accounts from
the data given below.
Process X Process Y Process Z
Materials 2,250 750 300
Labour 1,200 3,000 900
Direct Expenses:
Fuel 300 200 400
Carriage 500 300 100
Works Overhead 1,890 3,300 2,100
Process X Account
To Materials 2,250 By Transfer to Process Y 6,140
To Labour 1,200
To Direct Expenses:
Fuel 300
Carriage 500
To works overhead 1,890

------- -------
6,140 6,140
------- -------
Process Y Account
To Tr. From Process X 6,140 By Tr. To process Z 13,720
To Materials 750
To labour 3,000
To Direct Expenses:
Fuel 200
Carriage 500
To works overhead 3330

------- -------
13,720 13,720
------- -------
Process Z Account
To Tr. From Process Y 13,720 By Transfer to Finished 17,520
To Material 300 Goods
To Labour 900
To Direct Expenses:
Fuel 400
Carriage 100
To Works Overhead 2,100

------- -------
17,520 17,520
------- -------
E.g.2: The following information is given in
respect of process A
 Materials 1000k.g.@Rs. 6 perkg.
 Labour Rs. 5,000
 Direct expenses Rs. 1,000
 Indirect Expenses allocated to Process A Rs.

1,000 and Normal loss 100 kg.


Prepare Process A Account when:
(i) Scrap value of normal loss is nil
(ii) Scrap arising out of normal has a sale value
of Re. 1 per unit.
When Scrap value of normal loss is one

Particulars Kg. Amt Particulars Kg. Amt


To Materials 1,000 6,000 By Normal Loss 100 100
To Labour 5,000 By Transfer to 900 12,900
To Direct Exp. 1,000 Process B
To Indirect Exp. 1,000

----- -------
------ ------ 1,000 13,000
1,000 13,000 ----- -------
------ ------
E.g.3: The following information is obtained from the accounts
for the week ending 31st Oct, 2003

Items Total Process I Process II Process III


Direct Material 7,542 2,600 1,980 2,962
Direct Wages 9,000 2,000 3,000 4,000
Production Overhead 9,000

1,000 units @ Rs. 3 each were introduced to Process I. There was no


stock of material or work-in-progress at the beginning or at the end of
the period. The output of each process passes direct to the next process
and finally to finished stock. Production overhead is recovered on 100%
of direct wages. The following data are obtained.
Process Output during the % of normal loss Value of scrap
week to input per unit
I 950 5% 2

II 840 10% 4

III 750 15% 5


Prepare process cost accounts and abnormal gain or loss accounts.
Process I Account
Particulars Units Rs. Particulars Units Rs.
To Direct Mat. 2,600 By Normal Loss 50 100
To Direct Wages 2,000 By Process II 950 9,500
To Prod. O.h 2,000
(100% of direct
wages)
To Units 1,000 3,000
introduced
------ ------ ------- ------
1,000 9,600 1,000 9,600
------ ------ ------- ------
Process II Account
Particulars Units Rs. Particulars Units Rs.
To Process I 950 9,500 By Normal loss 95 380
Transfer By Abnormal 15 300
To Direct Mat. 1,980 Loss
To Direct Wage 3,000 By Process III 840 16,800
To Prod O.h. 3,000

------- ------ ------- ------


Note: 950 17,480 950 17,480
Abnormal Loss: Rs. 17,480 – Rs. 380 / 950-95 * 15 units

Rs. 300 (Rs. 20 p/u)


Process III Account
Particulars Units Rs. Particulars Units Rs.
To Process II 840 16,800 By Normal loss 126 630
To Direct Mat 2,962 By Finished stock 750 28,500
To Direct Wag 4,000
To Prod O.h 4,000
To Abnormal 36 1,368
gain
------- ------ ------- ------
Note: 876 29,130 876 29,130

Abnormal Gain: Rs. 27,762 – Rs. 630 / 840 – 126 units * 36 units

Rs. 1,368
Abnormal Loss Account
Particulars Units Rs. Particulars Units Rs.
To Process II 15 300 By Sale of Scrap 15 60
@ Rs. 4 Per Unit

By Costing P& L 240


A/c
------- ------ -------- -----
15 300 15 300

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy