Costing Methods & Techniques - Process Costing

1. A product passes through 3 processes for its completion. For the year ending 31/3/2020 following are
the details

Particulars Processes
Total X (Rs) Y (Rs.) Z (Rs.)
Materials 84,820 20,000 30,200 34,620
Labour 1,20,000 30,000 40,000 50,000
Production O/H 60,000 - - -

Direct expenses 7,260 5,000 2,260 -

1000 units at Rs. 50 per unit were introduced to Process X . Production overhead to be allocated on the
basis of direct labour

Prepare process accounts, abnormal loss and abnormal gain accounts.

2. Product B is obtained after it passes through 3 distinct processes. From the following information
prepare Process accounts, abnormal gain and loss accounts.

Particulars Processes
Total I (Rs) II (Rs.) III (Rs.)
Materials 7542 2600 1980 2962
Labour 9000 2,000 3,000 4000
Production O/H 9000 - - -

1000 units at Rs 3 per unit were introduced to Process I. Production overhead is recovered on 50% of
direct wages. Following are the additional information

Process Output during the week ( units) Normal loss to Scrap value/ unit
input (Rs.)
I 950 5% 2
II 840 10% 4
III 750 15% 5

3. A product passes through 3 processes for its completion. For the quarter ending 31/3/2003 following
are the details

Particulars Processes
X (Rs) Y (Rs.) Z (Rs.)
Materials 4600 8000 20,000
Labour 2,400 6,000 -
works O/H 5,600 2,350 4,200
Production in Units 36,000 37,500 48,000
Opening stock (units) - 4000 16,500
Closing stock (units) - 1,000 5500
The finished product obtained in Process Z account was sold at cost plus 20% by incurring Rs. 5000 as
selling and distribution expenses. Show the cost per unit in each process and also net profit for the
month.

4. The product passes through 3 stages with the following details on wastage
Process A – 2% Process B – 5% Process C – 10%
Wastage of Process A and Process B is sold at Rs.10 per 100 units and that of Process C at Rs. 80 per
100 units
The following information regarding production of March 2016

Process Sundry Material Direct Labour Mfg. Expenses Other Factory expenses
I 12,000 16,000 2,000 3,500
II 8,000 12,000 2,000 3,800
III 4,000 6,000 3,000 4,200
20,000 units have been issued to Project A at Rs. 20,000 The output of Process A – 19,500 units,
Process B – 18,800 units, Process C – 16,000 units. There was no stock of material, work in progress or
finished goods at the beginning or at the end of the period.
Prepare process Account and Abnormal loss and abnormal gain account.

5. The product of a company passes through 3 stages of production. The wastage in each process is as
follows – Process A – 3%, Process B – 5%, Process C– 8%
The wastage of Process A sold at 25 paisa, process B @ 50 paise, process C @ Rs 1 per unit . 10,000
units were issued to process A @ Rs. 2 per unit. The other details are as follows
Process Sundry Direct Direct Actual output Normal
Material Labour Expenses In units wastage
A 2,000 10,000 2,500 9,500 3%
B 3,000 16,000 2,400 9,100 5%
C 1,000 13,000 4,300 8,100 8%
Prepare process account, abnormal loss and abnormal gain a/c assuming no opening and closing stock
at the beginning or at the end.

6. The following details are taken from books of an Oil Mill for the month ended 31/3/2016.
Purchase of 100 tons of oil seeds at Rs.1000 per ton
Particulars Crushin Refining Finishing
g
Wages 1000 700 900
Sundry Stores 200 600 100
Electricity 400 350 200
Steam 300 250 200
Factory Expenses 500 400 300
Containers - - 2350
60 tons of crude oil was produced, 51 tons of oil was produced in refining process, 50 tons of refined
oil was finished for delivery. Empty bags of oil seeds were sold for Rs.100

35 tons of oil cake was sold at Rs.60 per ton