CMAC ICAP PAST PAPERS PROCESS COSTING

WITH SOLUTION

Question 1( S-20)
Scents Limited produces three joint products P, Q and R. Raw material is added at the beginning of
process I. On completion of process I, these three products are split in the ratio of 50:30:20
respectively. Joint costs incurred in process I are apportioned on the basis of net realizable value of
the three products at split-off point. Products P and Q are sold in the same state whereas product R is
further processed in process II before being sold in the market. A by-product TS is also produced in
process II.
Following information relating to the two processes is available for the month of February 2020:

Process I Process II

Raw material at Rs. 411 per kg 744,000 kg -

Direct labour at Rs. 200 per hour 611,568 hours 55,450 hours

Production overheads Rs. 91,456,000 Rs. 7,230,000

Additional information:
(i) Loss of 7% is considered normal in process I.

(ii) Details of opening and closing stocks, estimated cost to sell and selling price are given as
under:

Selling price Cost to sell Opening stock Closing stock

per kg (Rs.) per kg (Rs.) (kg) (kg)
Product P 1,045 15 - 20,200

Product Q 960 10 - 15,140

Product R 1,021 12 7,800 48,134

(iii) Values of opening and closing stocks of product R comprised of cost of both processes.
Value of opening stock of product R is Rs. 5,850,000.
(iv) In process II, 7450 kg of TS was produced and sold at Rs. 175 per kg. Proceeds from sale of
TS are adjusted against cost of process II.
(v) Selling and administration costs are charged to P, Q and R at 12% of sales.

FIFO method is used for inventory valuation.

Required:
Prepare product-wise income statement for the month of February 2020. (15)

1 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 2( A-19)

(Process Costing & Marginal / Absorption Costing)

Frappe Limited (FL) manufactures and sells a single product Sigma. Following information
is available:

 During the year ended 31 December 2018, FL sold 5,500 units at Rs. 25,000 per unit.
 Details of opening and closing work in process and finished goods are as follows:

Percentage of completion
Number of units
Direct material Conversion costs
Work in process:
Opening 400 100% 60%
Closing 800 100% 40%
Finished goods:
Opening 600 - -
Closing 900 - -

 The work in process account had been debited during the year with the following costs:

Rs. in '000
Direct material 82,350
Conversion costs (including fixed overheads of Rs. 16.762 million) 44,217

 Variable operating costs amounted to Rs. 500 per unit whereas fixed operating costs for the
year were Rs. 7,500,000.
 Effective from 1 January 2018, direct material price and conversion costs were increased by 5%
and 10% respectively.
 FL uses FIFO method for valuation of its inventories.

Required:
(a) Prepare statements of equivalent units and cost per equivalent unit. (04)
(b) Prepare profit statements on the basis of:
(i) marginal costing (08)
(ii) absorption costing (07)
(Round off all figures to the nearest rupee amount)

2 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 3( S-19)
Tulip Enterprises (TE) manufactures a product Alpha that requires two separate processes, A and B.
Following information has been extracted from the cost records of Process B for the month of February
2019:

Quantity Process A Process B cost

cost Material Conversion
Liters ------------- Rs. in '000 -------------
Opening work-in-process – 1,000 1,500 600 400
Process B
(80% complete as to conversion)
Cost for the month:
-Received from process A 90,000 14,000
- Added during process B 12,000 7,000 5,600
Closing work-in-process – 9,500
Process B
(70% complete as to conversion)

Additional information:

1) Materials are added at start of the process.

2) Normal loss is estimated at 5% of the input. Loss is determined at completion of the process.
Loss of each liter results in a solid waste of 0.75 kg. During the month of February 2019, solid
waste produced was 6,000 kg.
3) Solid waste is sold for Rs. 170 per kg after incurring further cost of Rs. 20 per kg.
4) TE uses weighted average method for valuation of inventory.

Required:
Prepare accounting entries to record the transactions of process B. (Narrations to accounting
entries are not required) (12)

3 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 4( A-18)

(Joint & By-Product)

Cricket Chemicals Limited (CCL) is a manufacturing concern and has two production processes. Process I
produces two joint products i.e. X-1 and X-2. Incidental to the production of joint products, it produces a
by-product known as Zee. X-1 is further processed in process II and converted into ‘X1-Plus’.
Following information has been extracted from the budget for the year ending 31 August 2019:
(i) Process wise budgeted cost:

Process I Process II
-------------- Rupees ------------
Direct material (500,000 liters) 98,750,000 -
Conversion cost 72,610,000 19,100,000
(ii) Expected output ratio from process I and budgeted selling prices:

Products Output ratio in process I Selling price (Rs. per liter)

Joint product – X-1 55% -
Joint product – X-2 40% 532
By-product – Zee 5% 120
X1-Plus - 768

Additional information:

(i) Material is added at the beginning of the process and CCL uses 'weighted average method' for
inventory valuation.
(ii) Joint costs are allocated on the basis of net realizable value of the joint products at the split-off
point. Proceeds from the sale of by-product are treated as reduction in joint costs.
(iii) Joint product X-2 is sold after incurring packing cost of Rs. 75 per liter.
(iv) Normal production loss in process I is estimated at 5% of the input which occurs at beginning of
the process. Loss of each liter results in a solid waste of 0.7 kg which is sold for Rs. 10 per kg. No
loss occurs during process II.
(v) Budgeted conversion cost of process I and process II include fixed factory overheads amounting
to Rs. 7,261,000 and Rs. 3,820,000 respectively.

Required:
(a) Prepare product wise budgeted income statement for the year ending 31 August 2019, under
marginal costing. (14)
(b) CCL has recently received an offer from Football Industries Limited (FIL) to purchase the entire
expected output of X-1 during the year ending 31 August 2019 at Rs. 670 per liter. It is estimated that if
process II is not carried out, fixed costs associated with it would reduce by Rs. 2,500,000. Advise
whether FIL’s offer may be accepted. (02)

4 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 5( S-18)

(Process Costing & Variances)

MZ Limited (MZL) manufactures a single product X and uses standard marginal costing system. The
standard cost card of product X is as follows:
Rupees
Raw material (13 kg @ Rs. 135 per kg) 1,755
Labour (14 hours @ Rs. 100 per hour) 1,400
Variable production overheads (Rs. 75 per labour hour) 1,050

Following data is available in respect of operations for the month of February 2018:

(i) 55,000 units were put into process. 1,500 units were lost in process which were considered to
be normal loss. Process losses occur at the end of the process.
(ii) 698,000 kg of material was purchased at Rs. 145 per kg. Material is added at the start of the
process and conversion costs are incurred evenly throughout the process.
(iii) 755,000 labour hours were worked during the month. However, due to certain labour related
issues, wages were paid at Rs. 115 per hour.
(iv) Fixed production overheads are budgeted at Rs. 40 million for the month of February 2018.
Total actual production overheads amounted to Rs. 95 million. Actual fixed production
overheads exceeded budgeted fixed overheads by Rs. 1.1 million.
(v) Inventory balances were as under:

01 February 2018 28 February 2018

Raw material (kg) 15,000 17,000
Work in process (units) 5,000 (60% converted) 6,000 (80% converted)
Finished goods (units) 10,000 12,000

(vi) MZL uses FIFO method for valuing the inventories.

Required:
Compute material, labour and overhead variances. (14)

5 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 6( A-17)

(Joint & By-Product)

Production at Platinum Chemicals (PC) involves two processes I and II. Following information pertains to
the month of August 2017:
(i) Actual cost:

Process I Process II
--------- Rupees ---------
Direct material (12,000 liters) 5,748,000 -
Conversion 2,610,000 1,542,000

(ii) Production and sales

Description Process I Process II

Remarks
Products: ------ Liters ------
Joint product – J101 Sold for Rs. 1,200 per liter after incurring
5,000
packing cost of Rs. 120 per liter
Joint product – J202 Transferred to process II for conversion
4,500
into a new product J-plus
By-product – BP01 Sold at the split-off point for Rs. 500 per
1,000
Liter
J-plus 3,400 Sold for Rs. 1,400 per liter
Work-in-process:
Opening
Closing 650 70% complete as to conversion

(iii) Materials are introduced at the beginning of process I and PC uses 'weighted average
method' for inventory valuation.
(iv) Proceeds from sale of by-product are treated as reduction in joint costs. Joint costs are
allocated on the basis of net realisable values of the joint products at split-off point.
(v) Normal production losses in both processes are estimated at 10% of the input and are
incurred at beginning of the process. Loss of each liter in process I results in a solid waste of
0.8 kg which is sold for Rs. 100 per kg. Loss of process II has no sale value.

Required:
(a) Compute the cost of sales of J101 and J-plus for the month of August 2017. (12)
(b) Prepare accounting entries to record production gains/losses and their ultimate disposal. (03)

6 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 7( A-16)
Bela Enterprises (BE) produces a chemical that requires two separate processes for its completion.
Following information pertains to process II for the month of August 2016:

Kg Rs. in '000
Opening work in process (85% to conversion) 5.000 2.000
Costs for the month:
Received from process I 30,000 18,000
Material added in process II 15,000 10,000
Conversion cost incurred in process II 11,000
Finished goods transferred to warehouse 40,000
Closing work in process (60% to conversion) 4,000

 In process II, material is added at start of the process and conversion costs are incurred evenly
throughout the process. Process losses are determined on inspection which is carried out on
80% completion of the process. Process loss is estimated at 10% of the inspected quantity and is
sold for Rs. 100 per kg.

 BE uses FIFO method for inventory valuation.

Required:
(a) Prepare a statement of equivalent production units. (04)
(b) Compute cost of:
 finished goods
 closing WIP
 abnormal loss/gain (09)
(c) Prepare accounting entries to record production gain/loss for the month. (03)

7 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 8 (A-15)

(Joint & By-Product)

Oceanic Chemicals manufactures two joint products Sigma and Beta in a single process at its production
department. Incidental to the production of these products, it produces a byproduct known as ZEE.
Sigma and ZEE are sold upon completion of processing in production department whereas Beta goes to
refining department where it is converted into Theta.

Joint costs are allocated to Sigma and Beta on the basis of their net realizable values. Proceeds from sale
of by-product are treated as reduction in joint costs. In both the departments, losses upto 5% of the
input are considered as a normal loss.

Actual data for the month of June 2015:

Department
Production Refining
Cost ------ Rs. in '000 ------
Material input at Rs. 50 per kg 3,000
Direct labour at Rs. 100 per hour 2,500 350
Production overheads 1,850 890
Output ---------- Liters----------
Sigma 34,800
Beta 16,055
ZEE (by-product) 5,845
Theta 15,200

Sigma, Theta and by-product ZEE were sold at Rs. 300, Rs. 500 and Rs. 40 per lite respectively. There was
no work in process at the beginning and the end of the month.

Required:
Compute the cost per liter of Sigma and Theta, for the month of June 2015. (12)

8 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 9 (S-15)
KS Limited operates two production departments A and B to produce a product XP-29. Following
information pertains to Department A for the month of December 2014.

Litres Rs. in '000’

Opening work in process (Material 100%, conversion 80%) 15,000
 Material 5,000
 Direct labour and overheads 2,125
Actual cost for the month:
 Material 12,000 36,240
 Direct labour 14,224
 Overheads 11,500
Expected losses 5%
Closing work in process (Material 100%, conversion 80%) 17,000
Units transferred to Department B 110,000

KS uses FIFO method for inventory valuation. Direct materials are added at the beginning of the process.
Expected losses are identified at the time of inspection which takes place at the end of the process.
Overheads are applied at the rate of 80% of direct labour cost.

Required:
(a) Equivalent production units (02)
(b) Cost of goods transferred to Department B (09)
(c) Accounting entries in the cost accounting system. (06)

9 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 10 (A-14)
Ababeel Foods produces and sells chicken nuggets. Boneless chicken is minced, spiced up, cut to
standard size and semi-cooked in the cooking department. Semi-cooked pieces are then frozen and
packed for shipping in the finishing department.

Inspection is carried out when the process in the cooking department is 80% complete. Normal loss is
5% of input and comprises of: 2% weight loss due to cooking; and 3% rejection of nuggets. The rejected
nuggets are sold at Rs. 60 per kg.

Overheads are applied at the rate of 120% of direct labour cost. Inventory is valued using weighted
average cost. Following information pertains to cooking department for the month of June 2014:

Required:
Prepare process account for cooking department for the month of June 2014. (15)

Question 11 (A-13)
Following data is available from the production records of Mian Industries for the month of August
2013. The company uses process costing to value its output.
 Input materials 5,000 units at the rate of Rs. 49 per unit.
 Conversion costs Rs. 30,000.
 Normal loss, which is 10% of input materials, is sold as scrap at Rs. 19 per unit.
 Actual loss 650 units.
 There were no opening or closing stocks.
Assume inspection is performed at the end of the process.

Required:
Calculate the amount of abnormal loss and cost of one unit of output. (03)

10 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 12 (S-13)
Colon Limited (CL) manufactures two joint products Pollen and Stigma in the ratio of 65:35. The
company has two production departments A and B. Pollen can either be sold at split off point or can
further be processed at department-B and sold as a new product Seeds. Stigma is sold without further
processing. Following information relating to the three products is available from CL’s records:

Pollen Stigma Seeds

---------------Rupees---------------
Sales price per kg 90 300 125
Total selling expenses 135,000 306,000 180,000

Following further information relating to the two departments is available

Department A Department B
Material X 75,000 kg at Rs. 60 per kg -
Material Y - 12,000 kg at Rs. 25 per kg
Labour @ Rs. 150 per hour 12,000 hours 3,600 hours
Variable overheads Rs. 125 per labour hour Rs. 65 per labour hour
Fixed overheads Rs. 100 per labour hour Rs. 50 per labour hour
Material input output ratio 100:88 100:96

Material is added at the beginning of the process. Joint costs are allocated on the basis of net realisable
value at split off point.

Required:

(a) Calculate the joint costs and apportion them to the two products. (10)
(b) Advise CL whether it should produce Seeds or sell Pollen without further processing. (06)

11 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 13 (A-12)
Fowl Limited (FL) manufactures two joint products X and Y from a single production process.
Raw material Benz is added at the beginning of the process. Inspection is performed when the units are
50% complete. Expected loss from rejection is estimated at 10% of the tested units. Following details are
available for the month of May 2012:

Material Conversion cost

Units
(Rs.) (Rs.)
Opening work in process 15,000 90,000 25,000
Transferred to finished goods:
Product- X 50,000 547,125 228,875
Product- Y 25,000
Loss due to rejection 12,500
Closing work in process 10,000

Additional information: (i) Opening and closing work in process are 75% complete.

 The normal loss is sold as scrap at the rate of Rs. 1.50 per unit.
 Production costs are allocated to joint products on the basis of weight of output.
 The company uses weighted average method for inventory valuation.

Required:
Cost of production report for the month of May 2012. (15)

12 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 14 (S-12)
Platinum Limited (PL) manufactures two joint products Alpha and Beta and a by-product Zeta from a
single production process. Following information is available from PL’s records for the month of
February 2012:

Direct material 25,000 kg. @ Rs. 25 per kg.

Direct labour @ Rs. 15 per hour Rs. 432,000
Normal process loss 20% of the material consumed

Overheads are allocated to the products at the rate of Rs. 10 per direct labour hour. The normal
loss is sold as scrap at the rate of Rs. 8 per kg.
Following data relates to the output from the process:

Product Output ratio Selling price per kg. (Rs.)

Alpha 75% 95.0
Beta 15% 175.0
Zeta 10% 52.5

Alpha is further processed at a cost of Rs. 30 per unit, before being sold in the market. Joint costs are
allocated on the basis of net realisable value.

Required:

Compute the total manufacturing costs for February 2012. Also calculate the profit per kg. for Alpha and
Beta. (10)

13 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 15 (A-11)
Hornbill Limited (HL) produces certain chemicals for textile industry. The company has three
production departments. All materials are introduced at the beginning of the process in Department-A
and subsequently transferred to Department-B. Any loss in Department-B is considered as a normal loss.
Following information has been extracted from the records of HL for Department-B for the month of
August 2011:

Department B
Opening work in process (Litres) Nil
Closing work in process (Litres) 10,500
Units transferred from Department-A (Litres) 55,000
Units transferred to Department-C (Litres) 39,500
Labour (Rupees) 27,520
Factory overhead (Rupees) 15,480

Materials from Department-A were transferred at the cost of Rs. 1.80 per litre. The degree of
completion of work in process as to cost originating in Department-B were as follows:

WIP Completion %
50% units 40%
20% units 30%
30% units 24.5%

Required:

Prepare cost of production report for Department-B for the month of August 2011. (15)

14 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 16 (S-10)
Smart Processing Limited produces lubricants for industrial machines. Material COX is introduced at the
start of the process in department A and subsequently transferred to department B. Normal loss in
department A is 5% of the units transferred. In department B, material COY is added just after inspection
which takes place when the production is 60% complete. 10% of the units processed are evaporated
before the inspection stage. However, no evaporation takes place after adding material COY. During the
year, actual evaporation in department B was 10% higher than the estimated normal losses because of
high level of Sulpher contents in natural gas used for processing. Other details for the year ended
December 31, 2009 are as under:

Department A Department B
---------- Rupees ----------
Opening work in process 2,184,000 2,080,000
Material input - 600,000 Litres 17,085,000
- 500,000 Litres 9,693,000
Labour 8,821,000 6,389,000
Overheads 2,940,000 3,727,000

Department A Department B
Completion % Completion %
Litres Conversion Litres Conversion
Material Material
costs costs
Opening WIP 64,500 100 60 40,000 100 60
Closing WIP 24,000 100 70 50,000 100 80

Conversion costs are incurred evenly throughout the process in both departments. The
company uses FIFO method for inventory valuation.

Required:
(a) Equivalent production units
(b) Cost of abnormal loss and closing WIP
(c) Cost of finished goods produced (22)

15 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 17 (A-09)
Excellent Limited makes and sells a single product. The standard cost card for the product, based on
normal capacity of 45,000 units per month is as under:

Rupees
Material 60 kgs at Re. 0.60 per kg 36.00
Labour ½ hour at Rs. 50.00 per hour 25.00
Variable factory overheads, 30% of direct labour cost 7.50
Fixed factory overheads 6.50
Total 75.00

Actual data for the month of August 2009 is as under:

Work in process on August 1, 2009 (60% converted) Units 10,000

Started during the month Units 50,000
Transferred to finished goods Units 48,000
Work in process on August 31, 2009 (50% converted) Units 10,000
Material purchased at Re. 0.50 per kg Rs. 1,750,000
Material issued to production Kgs 3,100,000
Direct labour at Rs. 52 per hour Rs. 1,300,000
Actual factory overheads (including fixed costs of Rs. 290,000) Rs. 600,000

The company uses FIFO method for inventory valuation. All materials are added at the beginning of the
process. Conversion costs are incurred evenly throughout the process. Inspection takes place when the
units are 80% complete. Under normal conditions, no spoilage should occur.

Required:

(a) Quantity and equivalent production schedules for material and conversion costs.
(b) Material, labour and overhead variances. (Use four variance method for overheads) (16)

16 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 18 (S-09)
A chemical is manufactured by passing through two processes X and Y using two types of direct
material, A and B. In process Y, a by-product is also produced which is then transferred to process Z
where it is completed. For the first week of a month, the actual data has been as follows:

The factory overheads are budgeted @ 240% of direct wages and are absorbed on the basis of direct
wages. Actual factory overheads for the week, amounted to Rs. 65,000. Estimated sales value of the by-
product at the time of transfer to process Z was Rs. 22 per unit.

Required:

Prepare the following:

 Process accounts for X, Y and Z.

 Abnormal loss and abnormal gain accounts.
 Factory overhead account. (17)

17 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 19 (S-08)
Yahya Limited produces a single product that passes through three departments, A, B and C. The
company uses FIFO method for process costing. A review of department A’s cost records for the month
of January 2008 shows the following details:

Units Material Rs. Labour Rs.

Work in process inventory as at January 1, 2008
(75% complete as to conversion costs) 16,000 64,000 28,000
Additional units started in January 2008 110,000
Material costs incurred 430,500
Labour costs incurred 230,000
Work in process inventory as at January 31, 2008
(50% complete as to conversion costs) 18,000
Units completed and transferred in January 2008 100,000

Overhead is applied at the rate of 120% of direct labour. Normal spoilage is 5% of output. The spoiled
units are sold in the market at Rs. 6 per unit.

Required:

Compute the following for the month of January:

 Equivalent production units.

 Costs per unit for material, labour and factory overhead.
 Cost of abnormal loss (or gain), closing work in process and the units transferred to the next
process. (16)

18 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 20 (S-07)
Star Chemicals Limited uses three processes to manufacture a product “ST”. After the third process the
product is transferred to finished goods warehouse. The following data for the month of January 2007 is
available:

Process
I II III
----------Rs. in thousands-------
Raw material – A 1,500
Other direct materials 2,500 3,200 4,000
Direct wages 5,000 6,000 8,000
Direct expenses 1,600 1,885 2,020

Following additional information is also available:

(i) Production overheads are absorbed @ 80% of direct wages;

(ii) 20,000 units of raw material ‘A’ having a cost of Rs. 1,500,000 were initially put in process-I.
(iii) In each process, an amount of Rs. 500,000 has been wrongly classified as direct wages, instead of
indirect wages.
(iv) The actual output obtained during the month was as under:

Process I 18,500 units

Process II 16,000 units
Process III 16,000 units

(v) Normal loss in each process is 10%, 10% and 5% respectively. Scrap value per unit is Rs. 100 for
process-I, Rs. 200 for process-II and Rs. 300 for process-III.
(vi) There was no stock at the start or at the end of any process.

Required:
Prepare the following in the books of Star Chemicals Limited:
(a) Ledger account for each process;
(b) Abnormal gain/(loss) account.

19 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Question 21 (A-06)
Broad-way Manufacturing Limited produces two products DL-1 & DL-2. The production involves two
processes, I and II. The following data is available in respect of production during the month of August
2006.

Process I Process II
Rs. Rs.
Material issued 375,000 100,000
Direct wages paid 150,000 200,000
Direct expenses incurred 100,000 100,000

During the month of August, materials issued to Process I and Process II were 1,250 tons and 230 tons
respectively. The cost of output of Process – I is charged to Process – II. Incidental to production, two by-
products i.e. PT-1 and PT-2 are generated in the first process and treated as a credit to Process-I.
Following additional information is also available:

Sales
Product Tons Rs. Packing Cost
DL-1 100 600,700 20,070
DL-2 900 1,203,500 100,350
PT-1 200 10,000 -
PT-2 50 2,500 -

A shortfall occurs in Process II due to evaporation which is considered as normal loss. There were no
opening or closing stocks.

Required:
(a) Calculate joint processing costs and apportion them between DL-1 and DL-2 on the basis of sales
value. (08)
(b) Prepare summary trading account for the month showing net profit of each product. (02)

20 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 2

21 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 3

22 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 4

23 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

24 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Conclusion: Offer should not be accepted

Solution 5

25 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 6

26 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

27 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 7

28 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 8

29 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 9

30 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

31 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 10

32 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 11

Solution 12

33 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

34 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

35 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 13

36 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 14

37 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 15

38 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 16

39 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

40 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 17

41 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

42 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 18

43 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

44 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 19

45 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

46 | PREPARED BY FAHAD IRFAN

CMAC ICAP PAST PAPERS PROCESS COSTING
WITH SOLUTION

Solution 20

47 | PREPARED BY FAHAD IRFAN