Preparation of Process Accounts (With process losses and no WIP) Practice Problem 5 Product A is obtained after it passes through three distinct processes. You are required to prepare Process Account from the following information Particulars Total Process X Process Y Process Z (OMR) Material 15084 5,200 3,960 5,924 Direct Wages Production Expense 18000 18000 4,000 6,000 8,000 1000 Units @ OMR 4 per Unit were introduced in Process X. Production Overheads to be distributed as 100 per cent on Direct Wages. Actual Output Units Normal Loss Value of Scrap per Unit Process X 950 05 % 04 Process Y 840 10 % 08 Process Z 750 15 % 10
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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