Problem # 1:

The Zee manufacturing company produces a single product which goes through one process only. The manufacturing cycle takes a month. The company started its manufacturing operation on 1st February, 2018 and costs of production for this month were as follows:

Material  Rs. 41,412;      Labor    Rs. 32,054;         FOH        Rs. 23,870

 

The production statistics for the month were as follow:

Units completed and transfer to finished goods store Rs. 6,500

Unit in Process on February 31, 2018 was 1,600 (Material 40%, Labor and FOH 20 per cent)

 

Requirement: Prepare the Cost of Production Report at the end of February, 2018

 

Solution:

process costing

 

>> Read theoretical concepts of Process Costing

 

Problem # 2:

The Prince Corporation has two production departments and maintains a process cost system. The following is a summary of the cots for the month of December, 2017:

process costing examples

 

Report form production control department shows as follows:

what is process costing

 

Solution:

process costing

 

process costing system

 

>> Do Practice Process Costing MCQs for more detailed learning.



 

Problem # 3:

Shah Manufacturing Company engaged in a continuous process, manufacturing a single product which is processed in three departments known as Cleaning, Milling and Finishing. There were no inventories at beginning of the March 2018.  Following data is available for preparing Cost of Production Report for three departments:

process costing examples

 

Solution:

process costing problems and solutions

 

process costing

 

job costing vs process costing

 

>> Further Practice Functional Budgets Problems and Solutions

 

Problem # 4:

Tazeen Ltd. is manufacturing a single product which is being processed in three departments called as Molding, Painting and Finishing. There were no inventories at beginning of the March 2018.  Following data is available for preparing Cost of Production Report for three departments:

process costing examples

 

Solution:

process costing is used when

 

process costing problems and solutions

 

process costing problems and solutions

 

>> Read theoretical concepts of Process Costing

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    Isha industries Limited uses a process cost system of there processes. The following data relates to its process-01. Beginning inventor Rs. 174,250 Raw Material used Rs. 297,000 Direct Labour Cost used Rs. 535,000F Factory Overhead Cost Applied Rs. 428,000 The data extracted from a quantity schedule related to the above processes are as follow: UnitsUnites in Process Beginning: 110,000(80% complete as to Material 70% as conversion Cost). Units placed in production 430,000 Units Complete 400,000 Units still process at the end 60% complete as to Material and 75% complete as to conversion cost.

    Reply
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