Process costing

The cases given below are from standard materials on this subject
Problem 1:
Compute the equivalent units for the month of May from the following details relating to
manufacture of a product.
Opening inventory of work in progress 300 units
Stage of completion
Material 30%
Labour 40%
Overheads 50%
Number of units put into the process 10,000 units
Transferred to the next process 9,600
Closing inventory of work in progress 700 units
Stages of completion
Material 80%
Labour 75%
Overheads 60%
(Pg 564, cost accounting, shukla grewal and gupta)
Problem 2:
The product manufactured by a light engineering factory undergoes two operations. The
following data are available relating to expenses incurred on production during November.
Machining
finishing
Units as input
90,000
60,000
Expenses incurred in process:
Direct material
2,70,000
Nil
Direct labor
1,28,000
45,000
overheads
64,000
1,35,000
At the end of the month there were 30,000 units lying incomplete in machining operation. While
the full quantity of materials had been consumed for the total production, the expenditure on
labor and overheads was estimated to be 66.66% in respect of the incomplete products. You are
required to prepare process accounts showing competed units of manufacturing operations being
transferred to finishing operation.
Pg 2.241, cost accounting ravi kishore
Problem 3:
X ltd a manufacturer of a specialized product, is having a process costing system. The stock of
work in progress at the end of each month is valued on FIFO basis. At the beginning of a month,
the stock of work in progress was 400 units (40% complete) which was valued as follows:
Materials 3,600
Labour 3,400
Overheads Rs 1,000
During the month, actual issue of materials for production purpose was Rs 68,500. Wages and
overheads in the month amounted to Rs 79,800 and Rs 21,280 respectively. Finished production
taken into the stock in the month was Rs 2,500 units. There was no loss in the process. At the end
of the month, the stock of work in progress was 500 units (60% complete) as to labour and
overheads and 80% complete as to materials.
(2.242, ravi kishore)

Question 4
A company manufactures a product which involves two consecutive processes, viz. Pressing and
Polishing. For the month of October, 2014, the following information is available:
Opening Stock
Input of units in process
Units completed
Units under process
Materials Cost
Conversion Cost

Pressing

1,200
1,000
200
Rs., 96,000
Rs. 3,36,000

Polishing

1,000
500
500
Rs. 8,000
Rs. 54,000

For incomplete units in process, charge materials cost at 100 percent and conversion cost at 60
percent in the Pressing Process and 50 percent in Polishing Process. Prepare a statement of cost
and calculate the selling price per unit which will result in 25 percent profit on sale price.
Problem 5:
ABC Ltd process its products in three process ie., I, II and III. Process II receives units from
Process I and after carrying out work on the unit transfers them to process III. For the month
ending 31st March 2012, the relevant data were as follows:
Opening WIP 2,000 units (25% complete) valued at Rs 25,000
8,000 units received from process I valued at Rs 43,000
8,400 units transferred to process III.
Closing WIP 1,600 units (50% compete)
The costs of the period was Rs 1,65,800 and no units were scrapped.
Prepare process II account using
a) FIFO
b) Weighted average cost method