Amy Ltd. uses a batch costing system that is fully integrated with its financial accounts. Balances at the beginning of the period is provided…

CA Intermediate · Cost and Management Accounting · RTP · May 2025
Amy Ltd. uses a batch costing system that is fully integrated with its financial accounts. Balances at the beginning of the period is provided below: Particulars (₹) Stores Ledger Control Account 4,83,250 Work-in-Process Control Account 3,86,600 Finished Goods Control Account 6,76,550 Other information is as under: Particulars Materials purchased during the period 14,49,750 Materials issued to production 5,79,900 Total wages paid (1/6th being indirect) 5,79,900 Direct wages charged to batches 3,86,600 Payment for non-productive time of direct workers 1/5th of direct wages paid Production Overheads incurred 2,31,960 Sales 19,33,000 Cost of Finished Goods Sold 15,46,400 Cost of Goods completed and transferred into finished goods during the period 12,56,450 Physical value of Work-in-Process at the end of the period 7,73,200 Production overhead absorption rate 130% of direct wages charged to Work-in-Process You are required to PREPARE the following accounts: (i) Stores Ledger Control Account. (ii) Wages Control Account. (iii) Production Overhead Control Account. (iv) Work-in-Process Control Account. (v) Finished Goods Control Account. (vi) Costing Profit and Loss Account.

Suggested Answer and Working Notes:

(i) Stores Ledger Control Account Particulars (₹) Particulars (₹) To Balance b/d 4,83,250 By Work in Process Control A/c 5,79,900 To Creditors/ Bank A/c 14,49,750 By Balance c/d 13,53,100 19,33,000 19,33,000 (ii) Wages Control Account Particulars (₹) Particulars (₹) To Bank A/c 5,79,900 By Work in Process Control A/c (Charged to batches) 3,86,600 By Production Oh Control A/c (Indirect wages) (1/6th of 5,79,900) 96,650 By Production Oh Control A/c (Non-productive wages) [1/5th of (5,79,900- 96,650)] 96,650 5,79,900 5,79,900 (iii) Production Overhead Control Account Particulars (₹) Particulars (₹) To Bank A/c 2,31,960 By Work-in-Process Control A/c (130% of 3,86,600) 5,02,580 To Wages Control A/c (96,650 + 96,650) 1,93,300 To Costing P&L A/c (Over-absorption, balancing figure) 77,320 5,02,580 5,02,580 (iv) Work-in-Process Control Account Particulars (₹) Particulars (₹) To Balance b/d 3,86,600 By Finished Goods Control A/c 12,56,450 To Store Ledger Control A/c 5,79,900 By Balance c/d (Physical value) 7,73,200 To Wages Control A/c 3,86,600 To Production OH Control A/c 5,02,580 To Costing P&L A/c (Stock Gains) 1,73,970 20,29,650 20,29,650 (v) Finished Goods Control Account Particulars (₹) Particulars (₹) To Balance b/d 6,76,550 By Costing Profit & Loss A/c (Cost of Goods Sold) 15,46,400 To Work-in-Process Control A/c 12,56,450 By Balance c/d 3,86,600 19,33,000 19,33,000 (vi) Costing Profit & Loss Account Particulars (₹) Particulars (₹) To Finished Goods Control A/c 15,46,400 By Sales A/c 19,33,000 To Balance c/d 6,37,890 By Production OH Control A/c 77,320 By Work-in-Process Control A/c (Stock gain) 1,73,970 21,84,290 21,84,290

Topics: Cost Accounting Systems

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