Page 300 - DCOM202_COST_ACCOUNTING_I

Cost Accounting – I

Notes 14.6 Keywords

By-products: Secondary product.

Equivalent Production: Number of units produced and material used.
Market Price: Price of a commodity in the market.
Physical Unit: A unit of measurement.

14.7 Review Questions

1. Explain the treatment of by-product in process costing.

2. Define joint products, by-products and give example of each.
3. Explain the various ways for apportioning of Joint cost to joint products.
4. “The value of scrap generated in a process should be credited to the process account”. Do
you agree with this statement? Give reasons.

5. What is the concept of Equivalent production? Explain in detail.
6. Explain briefly the distinction between Joint Products and By-products.
7. Explain the term Waste, Scrap, Spoilage and Defectives. Enumerate the steps for control
and the principles of accounting of such losses to be followed in manufacturing concern.
8. What are equivalent units of production? State the two principal methods of calculating
equivalent units.
9. What are various methods of accounting for By-products? Briefly explain each of the
methods.
10. What do you mean by inter-process profit? Discuss its procedure.
11. product A yields by-products B and C. The joint expenses of manufacture are:

Materials ` 11,200
Labour ` 9,500
On cost ` 9,000
` 29,700
Subsequent expenses are as follows:
A B C
(`) (`) (`)
Materials 4,000 2,500 1,300
Labour 4,200 3,000 1,200

On cost 4,400 2,000 1,000
12,600 7,500 3,500
The selling prices are 51,000 21,000 10,000
The estimated profit on sales is 40% 30% 20%

Show the manner in which you would apportion the joint expenses of manufacture and
prepare process Accounts.

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