Page 285 - DCOM202_COST_ACCOUNTING_I

Unit 14: Equivalent Production in Process Costing

Solution: Notes

Process Account I
Amount Amount
Particulars Qty. Particulars Qty.
(`) (`)
To Materials 600 4,000 By Transfer to process II 600 8,200
“ Labour 3,000 (Cost of per bottle
` 13.67)
“ Direct expenses 600
“ Indirect expenses 600
600 8,200 600 8,200

Process Account II

Amount Amount
Particulars Qty. Particulars Qty.
(`) (`)
To process I a/c 600 8,200 By By-product sold 240
“ Material 2,000 “ Transfer to Process III @ 600 15,190
“ Labour 2,500 ` 25.32
“ Direct expenses 200
“ Indirect expenses 500
“ Cost of bottles 2,030
600 15,430 600 15,430

Process Account III
Amount Amount
Particulars Qty. Particulars Qty.
(`) (`)
To process II a/c 600 15,190 By Residue sold 125
“ Materials 1,500 “ Finished goods a/c @ ` 600 20,390
“ Labour 2,500 33.98
“ Direct expenses 500
“ Indirect expenses 500
“ Cost of casks and spoons 325
600 20,515 600 20,515

Example: From the following information, find out the cost of X and Y the latter being by
the product on whose sale a profit of 20% on selling price is obtained usually.
Joint Expenditure (`) Separate Expenditure
X (`) Y (`)
Materials 9,000 2,000 1,000
Labour 4,000 800 300

Other expenses 2,000 1,000 400
Total amount realised by sale of Y is ` 1,100.

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