Page 272 - DCOM202_COST_ACCOUNTING_I

Cost Accounting – I

Notes Refining Process

Amount Amount
Particulars Tons Particulars Tons
(`) (`)
To Crude oil 300 1,94,000 By By-products 45 6,750
“ Labour 1,000 “ Loss in weight 5 --
“ Electric power 360 “ Cost refined oil products 250 1,92,050
“ Sundry materials 2,000 (cost per ton ` 768.20)
“ Repairs to machinery 330
“ Steam 450
“ Factory expenses 660
300 1,98,800 300 1,98,800

Finishing Process
Amount Amount
Particulars Tons Particulars Tons
(`) (`)
To Refined oil 250 1,92,050 By Loss in weight 2 --
“ Labour 1,500 “ Cost of finished oil 248 1,94,600
“ Electric power 240 produced (cost per ton `
788.20)
“ Repairs to machinery 140
“ Steam 450
“ Factory expenses 220
250 1,94,600 250 1,94,600
To Finished Oil 248 1,94,600 By Cost of oil (Cost of per 248 2,02,100
“ Cost of casks 7,500 ton ` 814.93)
248 2,02,100 248 2,02,100

Example: The following particulars are extracted from the books of the JK Oil company
for the week ending 7th March 2005:
Karnels consumed 100 tons ` 45,000.
Crushing (`) Refining (`) Finishing (`)
Wages 1,600 1,180 1,175
power and steam 240 200 300

Repairs and stores 80 — —
Rent and taxes 100 150 120
Sundry works expenses 40 50 70
Office expense ` 690
Sundry materials for refining ` 380

Barrels for storing finished oil ` 4,205
Cake sales 40 tons for ` 3,000, crude oil obtained 55 tons, sundry bags sold ` 180, residual oil
and fats sold for 180 (4 tons), refined oil 50 tons, finished oil stored in barrels 48 tons, and 2 tons
sundry sales realised ` 220. Office expenses are to be apportioned in ` 260, ` 280 and ` 150 to
the three processes in order. You are asked to prepare a crushing account, refining account and
finishing account.

266 LOVELY PROFESSIONAL UNIVERSITY