Page 298 - DCOM202_COST_ACCOUNTING_I

Cost Accounting – I

Notes Statement of Cost

Equivalent Cost per Total Cost
Production Elements of cost Cost (`)
Units unit (`)
Completed units Material (A) 14,500 5 72,500
Material (B) 14,500 3 43,500
Labour 14,500 1 14,500
production overheads 14,500 2 29,000 1,59,500
Closing Stock Material (A) 2,000 5 10,000
Material (B) 1,000 3 3,000
Labour 400 1 400
production overhead 400 2 800 14,200
Abnormal Gain Material (A) 250 5 1,250
Material (B) 250 3 750
Labour 250 1 250
production overhead 250 2 500 2,750
Process Account 2

Particulars Units ` Particulars Units `
To Balance b/d 1,000 7,150 By Normal loss a/c 750 3,750
“ Process 1 a/c 16,000 81,000 “ Process 3 a/c 14,500 1,59,500
“ Materials 43,750 “ Balance c/d 2,000 14,200
“ Labour 14,300
“ Production overheads 28,500
“ Abnormal gain 250 2,750
17,250 1,77,450 17,250 1,77,450

Normal Loss Account
To process 2 a/c 750 3,750 By Bank 500 2,500
“ Abnormal gain a/c 250 1,250
750 3,750 750 3,750

Abnormal Gain Account
To Normal loss a/c 250 1,250 By Bank 250 2,750
“ Costing P and L a/c 1,500
250 2,750 250 2,750
Working notes:
(a) Normal loss 5% of units processed i.e. 5% of 15,000 = 750 units
(b) Units processed = Opening stock + Transfer from Process 1 – Closing stock

= 1,000 +16,000 – 2,000 = 15,000 units
(c) Normal output = Opening WIp + Transfer from process 1 – Closing WIp – Normal Loss
= 1,000 + 16,000 – 2,000 – 750 = 14,250 units

292 LOVELY PROFESSIONAL UNIVERSITY