In a factory, 10,000 Kg of material was transferred from Process No.1 to Process No.2 at a cost of 80000. In Process No.2 the following costs were incurred:
Wages Overheads Sundry materials
6000 4000 2000
In Process 2, 10% of the input is normally lost. Actual output was 9200 kg. Wastage fetches 2/- per kg.
Prepare Process a/c and other related a/c's.
Solution Will update soon
The input to a purifying process was 16,000 kgs. Of basic material purchased @ 1.20 per kg. Process wages amounted to 720 and overhead was applied @ 240% of the labour cost. Indirect materials of negligible weight were introduced into the process at a cost of 336. The actual output from the process weighed 15,000 kgs. The normal yield of the process is 92%. Any difference in weight between the input of basic material and output of purified material (product) is sold @ 0.50 per kg.
The process is operated under a license which provides for the payment of royalty @ 0.15 per kg of the purified material produced.