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Job Costing and Overhead Calculations

This document discusses costing and overhead allocation for manufacturing jobs. It includes examples of calculating direct material, direct labor, overhead, production rates and costs, and profit margins. Formulas and calculations are provided for total job costs, cost per unit, selling price determination, and variances in applied versus actual overhead.

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Mukoya edward Edward
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4 views6 pages

Job Costing and Overhead Calculations

This document discusses costing and overhead allocation for manufacturing jobs. It includes examples of calculating direct material, direct labor, overhead, production rates and costs, and profit margins. Formulas and calculations are provided for total job costs, cost per unit, selling price determination, and variances in applied versus actual overhead.

Uploaded by

Mukoya edward Edward
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Exercise 2

Job 101

Calculation Amount
Direct material 100 units x N$12.50 1250

Direct labour 80 UNITS X 3HOURS X 1680


N$7

Overhead N$35 X 240 Hours 8400

Value of incomplete job 11 330

RATE:

Overhead= 70 000/2000= 35rate per labour hour

Actual hours:80 units x 3 hours= 240 hours


Unit 5(Tutorial)

Question 1

1.1

Machining
Estimated overhead 10 000 000
Machine hours 200 000
Rate 50

finishing
Estimated overhead 8 000 000
Labour cost 4 000 000
Rate 2

1.2

Overhead Machining
50 x 130 actual machine hours 6500
Overhead Finishing
2 x 1250{Actual labour cost) 2 500

1.3 total cost for the job

Machining Finishing
Direct material 14 000 3000

Direct labour cost 600 1250

Overhead 6500 2500


=21 100 =6 750
Total cost for the =N$27 850
job(21 100+6750)
UNITS PRODUCED 200
Production cost 139.25
per unit
1.4

100% less 30%= 70%

Cost: 139.25 x 30/70 =59.68(Gross profit)

59.68+139.25=N$198.93(Sales/seling price)

198.93 x 30/100 = 59.68(Gross profit)

1.5

 Choice of allocation base


 Bring favorable variable overhead cost(Machine)
 Sum up all Cost related to employees(Labour)
Question 3

3.1.1 Total cost

Calculation Amount
Direct material 4m XN$ 24 96

Direct labour 75hours x N$20 1 500

Overhead 22.35 x 75 hours 1676.25

Total cost for the job =N$3272.25

 When the basis is labour hours. You can only multiply by the
actual labour hours.

Rate: Budgeted overhead 28500/ 1275 labours hours

=22.35

3.1.2

Cost per unit

Total production cost 3272.25


Number of coats 5
Cost per unit 654.45
3.1.3

Selling price per coat Calculation


300%{profit}+100%{cost} 4 x 654.45 =N$2617.8
=400%
400/100 = 4

3.1.4

Actual manufacturing 1200


overhead
Applied 1676.25
manufacturing
overhead
Over applied 476.25

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