Page 253 - DCOM202_COST_ACCOUNTING_I

Unit 12: Process Costing and its Applications

process I process II process III Notes
Raw materials ` 5,000 3,000 2,000

Direct labour ` 3,000 2,500 2,300
Direct expenses ` 600 200 500
Cost of bottles ` Nil 2,030 Nil
Cost of corks ` Nil Nil 325
The indirect expenses for the period were ` 1,600. The by-products were sold for ` 240 in
process-II. The residue sold for ` 125 in process-III.
prepare the account in respect of each of the process showing its cost and cost of production of
the finished product per bottles.
Solution:

Process Account I
(Output: 600 Bottles)
Cost per Cost per
Particulars Total (`) Particulars Total (`)
bottle (`) bottle (`)
To Raw materials 8.333 5,000 By Transfer to process II 15.358 9,215
To Direct labour 5.000 3,000
To Direct expenses 1.000 600
To Indirect expenses 1.025 615
15.358 9,215 15.358 9,215

Process Account II

Cost per Cost per
Particulars Total (`) Particulars Total (`)
bottle (`) bottle (`)
To Transferred from process I 15.358 9,215 By Sale of By-products 0.400 240
To Raw materials 5.000 3,000 By Transfer to process III 28.695 17,218
To Direct labour 4.166 2,500
To Direct expenses 0.333 200
To Indirect expenses 0.855 513
To Cost of bottles 3.383 2,030
29.095 17,458 29.095 17,458

Process Account III
Cost per Cost per Total
Particulars Total (`) Particulars
bottle (`) bottle (`) (`)
To Transfer from 28.695 17,218 By Sale of residue 0.208 125
process II By Finished stock account 37.814 22,690
To Raw materials 3.333 2,000
To Direct labour 3.833 2,300
To Direct expenses 0.833 500
To Indirect expenses 0.786 472
To Cost of corks 0.542 325
38.022 22,815 38.022 22,815

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