# Problem 1

The information given below is extracted from the Cost Accounts of a factory producing a commodity in the manufacture of which three processes are involved. Prepare Process Cost Accounts showing the cost of the output and the cost per unit at each stage of manufacture.

(a) The operations in each separate process are completed daily.

(b) The value at which units are to be charged to process B and C is the cost per unit of processes A, and A plus B respectively.

Processes
A B C
Direct Wages
Machine Expenses
Raw Materials consumed
640
360
200
2,400
1,200
300
225
2,925
360
240

Production (Gross)
Wastage
Opening Stock of Raw Materials
Closing Stock of Raw Materials
Units
3,700
1,000

Units

1,500
4,000
1,000
Units

500
16,500
5,500

Solution Will update soon

# Problem 2

The following details have been extracted from the books of M/s Sunil Brothers (Pvt.) Ltd. having three workshops and a warehouse for the year 31st July, _5:
Workshop
A
Workshop
B
Workshop
C
Raw Materials used (in tonnes)
Cost per tonne
Direct wages
Chargeable expenses
Loss of tonnage due to processing
Proportion of production transferred:
To Workshop B at cost
To Workshop C at cost
Proportion of production transferred:
To Warehouse at cost
Stock on 1st August _4 at cost (ex-workshop)
Stock on 31st July _5 (ex-workshop-in tonnes)
Sales of products
Salaries
250
12
8,580
1,380
4%

20%

80%
250
10
40,000
4,000
2,000
152
8
2,025
1,387
5%

50%

50%
200
20

145
5
1,056
225
2½%

100%
400
40

The closing stock in the wholesale warehouse is to be valued at the prime cost per tonne during the year.

You are required:

1. To prepare workshop cost accounts for the year ended 31st July, _5,
2. To calculate prime cost per tonne of each process, and
3. To prepare an account showing the net profit of the business for the year ended 31st July, _5.

Solution Will update soon

# Problem 3

From the following figures, show the cost of each of the three processes of manufacture. The production of each process is passed on to the next process immediately on completion.

 Process A Process B Process C Materials Wages Work overhead Production in units Stock (Units from preceding process) 1st July, _9 Stock (Units from preceding process) 31st July, _9 4,000 2,400 5,600 36,000 8,000 4,000 5,250 37,500 4,000 1,000 20,000 9,250 6,000 48,000 16,500 5,500