Process Accounts and Abnormal Gain Quiz

Study Notes

Process Accounts and Abnormal Gain/Wastage

Units of raw material introduced into process X is 5000 with a cost of Rs. 20 per unit, the total value of the raw material introduced in process X is Rs. 100,000 (5000 units x Rs. 20/unit).
Normal loss in process X is 5% of the input, with a total of 250 units (5000 units x 5%)
Actual production in process X is 4700, calculated by subtracting the normal loss from the units introduced (5,000 - 250).
In process Y, 4300 units are actually produced with a normal loss of 10% (4300 units x 10% = 430).
Process Z actually produces 4050 units with a normal loss of 5% (4050 units x 5% = 202.5).
Direct material costs for processes X, Y, and Z are Rs. 97,500, Rs. 99,100, and Rs. 1,55,000 respectively.
Direct labor costs for processes X, Y, and Z are Rs. 30,000, Rs. 50,000, and Rs. 80,000 respectively.
Production overheads for all three processes are Rs. 320,000.
Production overheads are distributed among the three processes based on the ratio of direct labor, which totals Rs. 1,60,000 (Rs. 30,000 + Rs. 50,000 + Rs. 80,000).
The overhead cost for process X will be Rs. 60,000 (Rs. 30,000/Rs. 1,60,000 x Rs. 320,000)
The overhead cost for process Y will be Rs. 100,000 (Rs. 50,000/Rs. 1,60,000 x Rs. 320,000)
The overhead cost for process Z will be Rs. 160,000 (Rs. 80,000/Rs. 1,60,000 x Rs. 320,000)
The selling price of wastage is Rs. 10, Rs. 50, and Rs. 60 per unit for processes X, Y, and Z, respectively.

Description

Test your understanding of process accounts, including raw material costs, normal loss percentages, and actual production levels across different processes. This quiz covers the calculation of costs and losses in manufacturing scenarios, helping you grasp key accounting concepts. Perfect for students of accounting and finance.