Example of Process Account

Example of Process Account

The following example explains the basic principal of process account that how the output of one department is transferred to next department.

There are two department production and finishing. The production department cost of 100,000 units is during the year is as under

Item	amount
Material consumed	600,000
Labour applied	400,000
Overheads	200,000

Calculate the process account for production Department

                                                                Process Account (Production)

item	units	amount	item	Units	Amount
Material	100,000	600,000	Output-Finishing	100,000	1,200,000
Labour applied		400,000
Overheads		200,000
	100,000	1,200,000		100,000	1,200,000