Process Account – NBC Institute

IMAC – MAR 2024 – L1 – Q4 – Standard Costing and Variance Analysis

Distinguish between joint products and by-products, prepare a process account and income statement for Odotobiri Ltd

Question

a) Distinguish between joint product and by-product. (5 marks)

b) Odotobiri Ltd produces joint products (X, Y) from an identical manufacturing process. In December 2023, 11,000kg of materials were put into the production process. The total costs of processing (direct materials and conversion costs) were GH¢100,000. Output was 6,000 units of product X and 4,000 units of product Y and 1,000 units of a by-product Q. X has a sales value of GH¢24 per unit and Y has sales value of GH¢12 per unit. By-product Q has a sales value of GH¢1 per unit. The company has a policy to apportion joint costs based on sales value at a split-off point. 80% of the output of both X and Y was sold by the month-end.

Required:
i) Extract the Process Account. (6 marks)
ii) Prepare the Income Statement. (4 marks)

c) Controlling through standards and standard costing is a creative technique for company
managers to determine whether the organisation’s resources are being used effectively.
Standard costs are typically determined during budgetary control process because they
employ predetermined standard cost for direct material, direct labour, and factory overhead.
Required:
Explain FOUR (4) uses of standard costing.

Answer

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Tags: By-Products, Income Statement, Joint Products, Process Account, Standard Costing
Level: Level 1

Topic: Standard Costing and Variance Analysis
Series: MAR 2024

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

Question

a) The following information has been extracted from the records of a company for the half-year ended 31 March 2021. A product, Capital Q, goes through two processes, X and Y:

Details relating to Process X for the period: Input units: 5,000 Finished units transferred to Process Y: 3,200 Closing WIP: 840 Normal losses: 10%

Normal losses have an estimated resale value of GH¢4 per unit.

Costs incurred during the period:

	GH¢
Direct materials	31,250
Direct labour	21,200
Overheads	17,325

Abnormal Losses and Closing WIP had the following degrees of completion at the end of the period:

	Direct materials	Direct labour	Overheads
Abnormal Losses	100%	80%	50%
Closing WIP	100%	80%	50%

Required: Using the weighted average method: i) Compute the cost per unit for each of the element of costs. (5 marks)

b) Compute the value of the complete units transferred to Process Y. (5 marks)

c) Compute the value of the closing WIP. (5 marks)

d) Prepare Process X Account for the period. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Abnormal Loss, Cost per Unit, Functional Budgets, Principal Budget Factor, Process Account
Level: Level 1

Topic: Budgeting, Process Costing
Series: APR 2022

IMAC – MAR 2024 – L1 – Q4 – Standard Costing and Variance Analysis

Distinguish between joint products and by-products, prepare a process account and income statement for Odotobiri Ltd

Question

a) Distinguish between joint product and by-product. (5 marks)

Required:
i) Extract the Process Account. (6 marks)
ii) Prepare the Income Statement. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: By-Products, Income Statement, Joint Products, Process Account, Standard Costing
Level: Level 1

Topic: Standard Costing and Variance Analysis
Series: MAR 2024

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

Question

a) The following information has been extracted from the records of a company for the half-year ended 31 March 2021. A product, Capital Q, goes through two processes, X and Y:

Details relating to Process X for the period: Input units: 5,000 Finished units transferred to Process Y: 3,200 Closing WIP: 840 Normal losses: 10%

Normal losses have an estimated resale value of GH¢4 per unit.

Costs incurred during the period:

	GH¢
Direct materials	31,250
Direct labour	21,200
Overheads	17,325

Abnormal Losses and Closing WIP had the following degrees of completion at the end of the period:

	Direct materials	Direct labour	Overheads
Abnormal Losses	100%	80%	50%
Closing WIP	100%	80%	50%

Required: Using the weighted average method: i) Compute the cost per unit for each of the element of costs. (5 marks)

b) Compute the value of the complete units transferred to Process Y. (5 marks)

c) Compute the value of the closing WIP. (5 marks)

d) Prepare Process X Account for the period. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Abnormal Loss, Cost per Unit, Functional Budgets, Principal Budget Factor, Process Account
Level: Level 1

Topic: Budgeting, Process Costing
Series: APR 2022

Question Tag: Process Account

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IMAC – MAR 2024 – L1 – Q4 – Standard Costing and Variance Analysis

Distinguish between joint products and by-products, prepare a process account and income statement for Odotobiri Ltd

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

IMAC – MAR 2024 – L1 – Q4 – Standard Costing and Variance Analysis

Distinguish between joint products and by-products, prepare a process account and income statement for Odotobiri Ltd

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

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IMAC – MAR 2024 – L1 – Q4 – Standard Costing and Variance Analysis

Distinguish between joint products and by-products, prepare a process account and income statement for Odotobiri Ltd

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IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

You're reporting an error for "IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing"

IMAC – MAR 2024 – L1 – Q4 – Standard Costing and Variance Analysis

Distinguish between joint products and by-products, prepare a process account and income statement for Odotobiri Ltd

You're reporting an error for "IMAC – MAR 2024 – L1 – Q4 – Standard Costing and Variance Analysis"

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

You're reporting an error for "IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing"

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