Question 4
Subject:AccountingPrice: Bought3
Question 4. A Ltd. produces AXE' which passes through two processes before it is completed and transferred to finished stock. The following data related to October 2005: f Process I II Finished stock Rs. Rs. Rs. How Direct wages Q. 9, 10 11250 Opening stock 7,500 9,000 22,500 Direct materials 15,000 15,750 11,200 11,250 Factory overheads 10,500 4,500 1-4.250 Closing stock 3,700 4,500 Inter-process profit Included in opening stocks 1,500 8,250 Output of Process I is transferred Proces II at 25% profit on the?ransfer price? ie Selling Suite Output of Process II is transferred to finished stock at 20% profit on the transfer price, Stock in process is valued at prime cost. Finished stock is valued at the price at which it is received from process II. Sales during the period are Rs. 1,40,000. Prepare Process cost accounts and finished goods account showing the profit element at each stage. olsce PSZ A
