Page 246 - DCOM202_COST_ACCOUNTING_I

Cost Accounting – I

Notes The following data are obtained at the end of December 2007
Particulars Process I (`) Process II (`) Process III (`) Finished Stock (`)
Direct Material 30,000 20,000 40,000
Direct Wages 20,000 30,000 10,000
Stock as on 31st December 10,000 20,000 30,000 30,000
Sales during the year — — — 1,70,000
From the above information prepare,

(a) Process cost accounts showing the profit element at each stage
(b) Actual realized profit
(c) Stock valuation as would appear in the Balance Sheet
Solution:
The process Accounts are shown below.
Dr. process I A/c Cr
Particulars Total (`) Cost (`) Profit (`) Particulars Total (`) Cost (`) Profit (`)
To Material 30,000 30,000 — By Transfer to 50,000 40,000 10,000
process II A/c
To Wages 20,000 20,000 —
Total 50,000 50,000 —
Less: Closing Stock 10,000 10,000 —
c/d

prime Cost 40,000 40,000 —
Gross Profit 10,000 — 10,000
25% on cost
Total 50,000 40,000 10,000 Total 50,000 40,000 10,000
Stock b/d 10,000 — 10,000

Dr. process II A/c Cr
Particulars Total (`) Cost (`) Profit (`) Particulars Total (`) Cost (`) Profit (`)
To Transfer from 50,000 40,000 10,000 By Transfer to 1,00,000 72,000 28,000
process I process III
To Materials 20,000 20,000 —
To Wages 30,000 30,000
Total 1,00,000 90,000 10,000
Less: Closing Stock 20,000 18,000 2,000
c/d

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