Golden Harvest Foods Pvt. Ltd. is engaged in the production of organic honey blocks. Its process involves crushing of honeycombs for nectar…

(i) Statement of Equivalent Production Particulars Input Units Particulars Output Units Equivalent Production Honeycomb Labour & O.H. % Units % Units Opening WIP 4,500 Completed and transferred to Process - II 39,500 100 39,500 100 39,500 Units introduced 1,00,000 Normal Loss (55%* of 1,00,000) 55,000 Abnormal loss 1,000 100 1,000 80 800 Closing WIP 9,000 100 9,000 80 7,200 1,04,500 1,04,500 49,500 47,500 * For every 100 kg of honeycombs, only 45 litres of nectar are extracted. Thus, normal loss = 100 – 45 = 55% (ii) Statement showing cost for each element Particulars Honeycomb (₹) Labour (₹) Overhead (₹) Total (₹) Cost of opening work-in-process 50,000 15,000 45,000 1,10,000 Cost incurred during the month 5,00,000 2,00,000 6,00,000 13,00,000 Total cost: (A) 5,50,000 2,15,000 6,45,000 14,10,000 Equivalent units: (B) 49,500 47,500 47,500 Cost per equivalent unit: (C) = (A ÷ B) 11.111 4.526 13.579 29.216 (iii) Statement of Distribution of cost Amount (₹) Amount (₹) 1. Value of units completed and transferred (39,500 units × ₹ 29.216) 11,54,032 2. Value of Abnormal Loss: - Honeycomb (1,000 units × ₹ 11.111) 11,111 - Labour (800 units × 4.526) 3,621 - Overheads (800 units × ₹ 13.579) 10,863 25,595 3. Value of Closing W-I-P: - Honeycomb (9,000 units × ₹ 11.111) 99,999 - Labour (7,200 units × 4.526) 32,587 - Overheads (7,200 units × ₹ 13.579) 97,769 2,30,355 (iv) Process-I A/c (Nectar Extraction) Particulars Units (₹) Particulars Units (₹) To Opening W.I.P: By Normal Loss 55,000 Honeycomb 4,500 50,000 By Abnormal loss (25,595 + 18 (difference due to approximation)) 1,000 25,613 Labour 15,000 By Process-II A/c 39,500 11,54,032 Overheads 45,000 By Closing WIP 9,000 2,30,355 To Honeycomb introduced 100,000 5,00,000 To Direct Labour 2,00,000 To Overheads 6,00,000 104,500 14,10,000 104,500 14,10,000