Question

What do you mean by inter process profit? How is the profit calculated?

Answer 1

Hello dear ☺

Here's the answer ⤵

Inter Process Profit:

Accounting Of Goods Transfer From One Process To Another Process At A Certain Percentage Of Profit. Calculation Of Unrealized Profit Which Includes In Opening & Closing Stock Of Each Process A/C.

Hope it helps ✌

Answer 2

Answer: Value added other than cost while being transferred from one process to another is inter process profit.

Explanation:

Inter process profit:

Value added to the output apart from the cost while being transferred from one process to another. The value added is apart from cost incurred therefore, it would result in an amount of profit equal to the value addition.

Inter process profit means profits in between process.

Here, the output is valued at a transfer price therefore, there is a possibility of profit or loss occurring on account of the transfer.

PROFIT=SALE PRICE-COST PRICE