Answer :
To prepare the process accounts for Processes A and B, we will follow these steps:
### Process A Account
1. Calculate Normal Wastage (Units and Value) for Process A:
- Normal Wastage Units:
[tex]\[ \text{Normal Wastage } = \text{Input Units} \times \left(\frac{\text{Normal Wastage \%}}{100}\right) = 10000 \times \left(\frac{5}{100}\right) = 500 \][/tex]
- Normal Wastage Value:
[tex]\[ \text{Normal Wastage Value} = \text{Normal Wastage Units} \times \text{Value per 100 units} = 500 \times 8 = 4000 \][/tex]
2. Total Cost for Process A:
- Summing all costs and adjusting for normal wastage value:
[tex]\[ \text{Total Cost } = \text{Materials Consumed} + \text{Direct Labour} + \text{Manufacturing Expenses} + \text{Input Value} - \text{Normal Wastage Value} = 12000 + 14000 + 4000 + 10000 - 4000 = 36000 \][/tex]
3. Cost per Unit for Process A:
- Total Output Units: 9400
- [tex]\[ \text{Cost per Unit} = \frac{\text{Total Cost}}{\text{Output Units}} = \frac{36000}{9400} \approx 3.83 \][/tex]
### Process B Account
1. Calculate Normal Wastage (Units and Value) for Process B:
- Normal Wastage Units:
[tex]\[ \text{Normal Wastage } = \text{Output Units from Process A} \times \left(\frac{\text{Normal Wastage \%}}{100}\right) = 9400 \times \left(\frac{10}{100}\right) = 940 \][/tex]
- Normal Wastage Value:
[tex]\[ \text{Normal Wastage Value} = \text{Normal Wastage Units} \times \text{Value per 100 units} = 940 \times 10 = 9400 \][/tex]
2. Input Value from Process A into Process B:
- [tex]\[ \text{Input Value from Process A} = \text{Output Units from Process A} \times \text{Cost per Unit from Process A} = 9400 \times 3.83 \approx 35998 \][/tex]
3. Total Cost for Process B:
- Summing all costs and adjusting for normal wastage value:
[tex]\[ \text{Total Cost } = \text{Materials Consumed} + \text{Direct Labour} + \text{Manufacturing Expenses} + \text{Input Value from Process A} - \text{Normal Wastage Value} = 6000 + 8000 + 4000 + 35998 - 9400 = 44600 \][/tex]
4. Cost per Unit for Process B:
- Total Output Units: 8300
- [tex]\[ \text{Cost per Unit} = \frac{\text{Total Cost}}{\text{Output Units}} = \frac{44600}{8300} \approx 5.37 \][/tex]
### Final Result Breakdown
- Units of Normal Wastage for Process A: 500 units
- Value of Normal Wastage for Process A: Rs. 4,000
- Total Cost for Process A: Rs. 36,000
- Cost per Unit for Process A: Rs. 3.83
- Units of Normal Wastage for Process B: 940 units
- Value of Normal Wastage for Process B: Rs. 9,400
- Total Cost for Process B: Rs. 44,600
- Cost per Unit for Process B: Rs. 5.37
By calculating the above steps, we can prepare and complete the process accounts for both Process A and Process B accurately.
### Process A Account
1. Calculate Normal Wastage (Units and Value) for Process A:
- Normal Wastage Units:
[tex]\[ \text{Normal Wastage } = \text{Input Units} \times \left(\frac{\text{Normal Wastage \%}}{100}\right) = 10000 \times \left(\frac{5}{100}\right) = 500 \][/tex]
- Normal Wastage Value:
[tex]\[ \text{Normal Wastage Value} = \text{Normal Wastage Units} \times \text{Value per 100 units} = 500 \times 8 = 4000 \][/tex]
2. Total Cost for Process A:
- Summing all costs and adjusting for normal wastage value:
[tex]\[ \text{Total Cost } = \text{Materials Consumed} + \text{Direct Labour} + \text{Manufacturing Expenses} + \text{Input Value} - \text{Normal Wastage Value} = 12000 + 14000 + 4000 + 10000 - 4000 = 36000 \][/tex]
3. Cost per Unit for Process A:
- Total Output Units: 9400
- [tex]\[ \text{Cost per Unit} = \frac{\text{Total Cost}}{\text{Output Units}} = \frac{36000}{9400} \approx 3.83 \][/tex]
### Process B Account
1. Calculate Normal Wastage (Units and Value) for Process B:
- Normal Wastage Units:
[tex]\[ \text{Normal Wastage } = \text{Output Units from Process A} \times \left(\frac{\text{Normal Wastage \%}}{100}\right) = 9400 \times \left(\frac{10}{100}\right) = 940 \][/tex]
- Normal Wastage Value:
[tex]\[ \text{Normal Wastage Value} = \text{Normal Wastage Units} \times \text{Value per 100 units} = 940 \times 10 = 9400 \][/tex]
2. Input Value from Process A into Process B:
- [tex]\[ \text{Input Value from Process A} = \text{Output Units from Process A} \times \text{Cost per Unit from Process A} = 9400 \times 3.83 \approx 35998 \][/tex]
3. Total Cost for Process B:
- Summing all costs and adjusting for normal wastage value:
[tex]\[ \text{Total Cost } = \text{Materials Consumed} + \text{Direct Labour} + \text{Manufacturing Expenses} + \text{Input Value from Process A} - \text{Normal Wastage Value} = 6000 + 8000 + 4000 + 35998 - 9400 = 44600 \][/tex]
4. Cost per Unit for Process B:
- Total Output Units: 8300
- [tex]\[ \text{Cost per Unit} = \frac{\text{Total Cost}}{\text{Output Units}} = \frac{44600}{8300} \approx 5.37 \][/tex]
### Final Result Breakdown
- Units of Normal Wastage for Process A: 500 units
- Value of Normal Wastage for Process A: Rs. 4,000
- Total Cost for Process A: Rs. 36,000
- Cost per Unit for Process A: Rs. 3.83
- Units of Normal Wastage for Process B: 940 units
- Value of Normal Wastage for Process B: Rs. 9,400
- Total Cost for Process B: Rs. 44,600
- Cost per Unit for Process B: Rs. 5.37
By calculating the above steps, we can prepare and complete the process accounts for both Process A and Process B accurately.
