Product “X” passes through three processes before it is completed and transferred to the finished stock.
The following data are available for the month of June
|
Details |
Process |
Process |
Process III |
Finished |
|
Opening stock |
5,000 |
8,000 |
10,000 |
20,000 |
|
Direct materials |
40,000 |
12,000 |
15,000 |
– |
|
Direct labour |
35,000 |
40,000 |
35,000 |
– |
|
Production |
20,000 |
24,000 |
20,000 |
– |
|
Closing stock |
10,000 |
4,000 |
15,000 |
30,000 |
Output of Process I is transferred to Process II at 25% on the transfer price.
Output of Process II is transferred to Process III at 20% on the transfer price.
Output of Process III is transferred to the finished stock at 10% on the transfer price.
Stocks in progress have been valued at prime cost. Finished stock has been valued at the price at which it was received from Process III. Sales amounted to Rs. 4,00,000. [Provision for internal process profits as on 1 June were
|
Included in Process II |
1,395 |
|
Included in Process III |
2,690 |
|
Included in finished stock |
6,534 |
|
10,619 |
These provisions would be created in the previous month in respect of closing stock. Consequently, they are brought into the account of June month as provisions in respect of internal process profits in the opening stock.]
Prepare and compute (a) Process accounts showing profit element at each stage (b) Actual realized profit (c) Stock valuation for balance-sheet purposes (d) Provision for profit A/c.