# Process Accounts : Normal/Abnormal Loss, Abnormal Gain : Problems

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01.
A Product passes through two distinct processes, A and B. From the following information you are required to write the process accounts, abnormal loss/gain accounts.

Units Issued---Process A 10,000 units at Rs. 10each.

 Process ARs. Process BRs. Material added Direct LabourOverheadsNormal wastage (% of input)(Scrap value of normal loss)Output (units) 40,00020,00013,5005%Rs. 5 per unit9,400 30,00024,00022,6105%Rs. 10 per unit9,000

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02.
In a factory the product passes through two processes A and B. A loss of 5% is allowed in Process A and 2% in Process B, nothing being realized by disposal of wastage.

During April, 2005, 10,000 units of material costing Rs. 6 per unit were introduced in Process A. The other costs are :

 Process ARs. Process BRs. Materials LabourOverheads —10,0006,000 6,1406,0004,600

The output was 9,300 units from Process A. 9,200 units were produced by Process B, which were transferred to the warehouse.

8,000 units of the finished product was sold @ Rs. 15 per unit. The selling and distribution expenses were Rs. 2 per unit.

Prepare (i) Process Accounts; and (ii) A statement of profit or loss of the firm for April 2005, assuming there were no opening stocks of any type.

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03.
The product of a manufacturing concern passes through two processes A and B and then to finished stock. It is ascertained that in each process normally 5% of the total weight is lost and 10% is scrap which from Processes A and B realizes Rs. 80 per ton and Rs. 200 per ton respectively.

The following are the figures relating to both the processes:
 Process A Process B Material in tonsCost of materials per ton in rupeesWages in rupeesManufacturing expenses in rupeesOutput to tons 1,00012528,0008,000830 7020010,0005,250780

Prepare Process Cost Accounts showing cost per ton of each process. There was no stock or work-in-progress in any process

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04.
Make out the necessary accounts from the following details:

 Process ARs. Process BRs. Materials LabourOverheadsInput (units)Normal lossSales value of wastage per unit 30,00010,0007,00020,00010%1 3,00012,0008,60017,5004%2

There was no opening or closing stock or work-in-progress. Final output from Process B was 17,000 units.

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05.
Product 'Z' is obtained after it passes through three distinct processes. The following information is obtained from the accounts for the month ending March 31, 2005:

 Processes Items TotalRs. IRs. IIRs. IIIRs. Direct MaterialsDirect WagesProduction Overhead 7,5429,0009,000 2,6002,000— 1,9803,000— 2,9624,000—

1,000 units at Rs. 3 each were introduced to Process I. There was no stock of material or work-in-progress at the beginning or end of the period. The output of each process passes direct to the next process and finally to finished stores. Production overhead is recovered on 100 percent of direct wages. The following additional data are obtained:
 Process Output duringthe month Percentage of normalloss to input Value of scrapper unit Rs. IIIIII 950840750 5%10%15% 245

Prepare process cost accounts and abnormal gain or loss accounts.

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06.
A product passes through three processes to completion in January, 1988, the cost of production was as given below:

 Processes I II III Direct Material Wages Production Overheads 2,0003,5001,500 3,0204,2262,000 3,4625,0002,500

1,000 units were issued to Process I @ Rs. 5 each.
 Normal LossWastage realisedActual Production (units) I10%Rs. 3 per unit920 II5%Rs. 5 per unit870 III10%Rs. 6 per unit800

Prepare the necessary accounts.

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07.
A product passes through three process viz., Process I. Process II. and Process III. The normal wastage of each process is:

Process I: 3%; Process II: 6%; and Process III: 10%.

The percentage of normal wastage in each case is computed on the basis of the number of units entering the process concerned. The wastage of Process I is sold @ 25 paise per unit, that of Process II is sold @ 50 paise per unit and that of Process III is sold @ Re. 1 per unit, The other expenses are:

 Process I Process II Process III Material ConsumedDirect LabourManufacturing expenses 1,5007,5001,575 2,25012,0001,425 7509,7503,015

The output of each process has been as follows:
 ProcessProcessProcess IIIIII ——— 14,25013,65012,012

Prepare process cost accounts and abnormal wastage and abnormal effective accounts.

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08.
The product of company passes through three distinct processes to completion. They are known as A, B and C. From past experience it is ascertained that loss is incurred in each process as Process A : 2%, Process B: 5% Process C : 10%

In each case the percentage of loss is computed on the number of units entering the process concerned.

The loss of each process possesses a scrap value. The loss of processes A and B is sold at Rs. 5 per 100 units and that of process C at Rs. 20 per 100 units. The output of each process passes immediately to the next process and the finished units are passed from process C into stock

 Process ARs. Process BRs. Process CRs. Materials consumedDirect LabourManufacturing Expenses 6,0008,0001,000 4,0006,0001,000 2,0003,0001,500

20,000 units have been issued to process A at a cost of Rs. 10,000. The output of each process has been as under:

Process A : 19,500; Process B: 18,800; Process C : 16,000

There is no work-in-progress in any process. Prepare Process accounts, Calculations should be made to the nearest rupee.

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 Author Credit : The Edifier