Question

Parul Ltd. produces patent materials used in building construction, the manufacture of which
involves three processes. The material is produced in three consecutive grades namely soft
,
medium and hard. Figures relating to production for the first six months of 2020 are as
follows:
Process II
Process III
Raw materialintroduced (tons)
Cost of material per ton (Rs)
Process I
1,000
Rs 200
40.800
Manufacturing wages and Expenses (Rs) 72,500
10,710
5%
100%
20%
Weight lost (Normal)
Scrap sold at Rs.50 per ton
50 tons
30 tons
51 tons
Transferred to the next process
Two-third of
output
One-third of
output
One-half of Nil
output
One-half of 100%
output
Transferred to warehouse for sale
1420
You are required to prepare process accounts showing clearly cost per ton at each process.​

Answer 1

Explanation:

process a/c soft = cost per unit = (272500-2500)/900 = Rs 300

process a/c medium = cost per unit =( 211327-1500)/570 = Rs 368.12