10.2. Product X is obtained after it passes through three distinct processes.
ou are required to prepare Process Accounts, Normal Loss Account, Abnormal
oss Account, Abnormal Effectives (gain) Account and Profit & Loss Account...
50,000 units @ 100 per unit were introduced in Process 1
Process 1 Process 2 Process 3
Material ()
50,000 75,000 25,000
Labour ()
1,50,000 4,00,000
3,25,000
Overheads (3)
30,000
90,750 1,36,000
Actual output (units)
27,000 10,500
Normal loss (calculated on
5%
15%
20%
input of each process)
10
25
50
Value of scrap (per unit)
Selling price per unit of output
600
1,250
(in )
46,500
825
Management expenses during the year were 4,00,000 and selling expenses
were 2.50,000. These are not allocable to the process. Two-third of the output of
Process A and one-half of the output of Process B was passed on to the next
Process and the balance was sold. The entire output of Process C was sold. (11)
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