Product AB passes through two processes A and B before it is transferred to finished stock. The following information is obtained for the month of…
BBS Cost and Management Accounting · 2078 · Solved Question with Answer
Product AB passes through two processes A and B before it is transferred to finished stock. The following information is obtained for the month of January:
| Process A (Rs.) | Process B (Rs.) | Finished Stock (Rs) | |
| Opening Stock | 12,000 | 15,000 | 20,000 |
| Direct Material | 30,000 | 40,00 | - |
| Direct Wages | 25,00 | 30,000 | - |
| Factory Overhead | 20,000 | 30,000 | - |
| Closing Stock | 7,000 | 15,000 | 20,000 |
| Inter -process profit included in Opening Stock | - | 3,125 | 9,750 |
The output of process A is transferred to process B at 25% profit on the cost price.
The output of process B is transferred to finished stock at 25% profit on cost price.
The stocks in process are valued at prime cost. The finished stock is valued at the price at which it is received from process B. Sales during the period are Rs. 300,000.
Required:
a. Process Account
b. Finished Stock Account
c. Actual realized profit
d. Stock valuation for Balance Sheet purpose (5+5+3+1+1)