The product manufactured by the Standard Chemicals Ltd. Passes through three process I,ll and II. Following costs have been incurred for the month of September 2018: Process I Process II Process III (S) 7,500 Details 1 Material Consumed 2 Direct Wages 3 Direct Expenses Total($) 4 Output 5 Finished Process Stock : ($) 40,000 (S) 5,000 22,500 10,000 10,000 20,500 (units) 3,900 2,250 2,505 (units) |(units) 3,850 3,200 |(i) 1-9-2018 600 550 800 |(ii) 30-9-2018 6 Stock Valuation on 01-9-2018 ($ per unit) 7 Percentage of Loss 8 Net Realisable Value of Loss per unit ($) 500 800 NIL 24.5 31 37 5 10 13.5 16.25 21 Four thousand units of raw materials were introduced in of rupees twenty thousand. Stocks are valued and transferred to subsequent processes at weighted average cost. The percentage of loss is computed on the number of units entering the process concerned. Prepare (i) Process A/cs; (ii) Process Stock A/cs ; (iii) Normal Loss A/c; (iv) Abnormal Loss/ Gain or /Effective Alc.
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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