Problem:
Product B is obtained after it passes through three district processes. The following information is obtained from the accounts for the ending on 31 December 2009:
|
Items
|
Total
Rs.
|
Process I
Rs.
|
Process II
Rs.
|
Process III
Rs.
|
|
Direct materials Direct wages Production Overheads
|
7,542
9,000
9,000
|
2,600
2,000
-
|
1,980
3,000
-
|
2,962
4,000
-
|
1,000 units at Rs. 3 each were introduced to Process I. There was no stock of materials or work-in-process at the beginning or at the end of each process. The output of each process passes to the next process and finally to the finished stores. Production overheads recovered on 100% of direct wages. The following additional data are obtained:
|
Process
|
Output
During the
Week
|
Percentage of
Normal Loss to
Input
|
Value of Scrap
Per Unit
Rs.
|
|
I
II
III
|
950
840
750
|
5% 10% 15%
|
2
4
5
|
Prepare process cost accounts and abnormal loss or gain account.