Page 247 - DCOM202_COST_ACCOUNTING_I

Unit 12: Process Costing and its Applications

Dr. process III A/c Cr Notes
Particulars Total (`) Cost (`) Profit (`) Particulars Total (`) Cost (`) Profit (`)
prime Cost 80,000 72,000 8,000
Gross Profit 25% 20,000 — 20,000
on cost

Total 1,00,000 72,000 28,000 Total 1,00,000 72,000 28,000
Stock b/d 20,000 28,000 2,000
Dr. Finished Stock A/c Cr
Particulars Total (`) Cost (`) Profit (`) Particulars Total (`) Cost (`) Profit (`)
To Transfer from 1,00,000 72,000 28000 By Transfer to 1,50,000 97,600 52,400
process II Finished Stock

To Materials 40,000 40,000 --------
To Wages 10,000 10,000
Total 1,50,000 1,22,000 28,000
Less: Closing Stock 30,000 24,400 5,600
c/d
prime Cost 1,20,000 97,600 22,400
Gross Profit – 25% 30,000 ------- 30,000
on cost
Total 1,50,000 97,600 52,400 Total 1,50,000 97,600 52,400
Dr. Finished Stock A/c Cr
Particulars Total (`) Cost (`) Profit (`) Particulars Total (`) Cost (`) Profit (`)
To Transfer from 1,50,000 97,600 52,400 By Sales 1,70,000 78,080 91,920
process III
Less: Stock c/d 30,000 19,520 10,480
Total 1,20,000 78,080 41,920
Gross Profit 25% 50,000 --- 50,000
on cost

Total 1,70,000 78,080 91,920 Total 1,70,000 78,080 91,920
Stock b/d 30,000 19,520 10,480
(A) Calculation of Profit on Closing Stock
The amount of profit included in the closing stock can be computed with the help of the
following formula.
Cost of stock = [Cost column/Total column] x Stock Process I = Amount of profit = nil
Process II = [Cost column/Total column] x Stock

™ z ` 90,000/` 1,00,000 x 20,000 = ` 18,000
™ z Profit = ` 20,000 – ` 18,000 = ` 2,000
process III = ` 1,22,000/1,50,000 x 30,000 = ` 24,400
Profit = ` 30,000 – ` 24,400 = ` 5,600

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