Scribd
Upload
28 views1 page

Cost Calculation for Job No. 415

The document outlines the direct costs incurred for Job No. 415 at Standard Radio Company, including materials, wages, and overhead expenses. It provides calculations for direct materials, wages by department, variable and fixed overheads, and the total cost of the job. Additionally, it explains how to determine the selling price to achieve a 25% profit margin based on the total cost.

Uploaded by

charleschirwa477
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
28 views1 page

Cost Calculation for Job No. 415

The document outlines the direct costs incurred for Job No. 415 at Standard Radio Company, including materials, wages, and overhead expenses. It provides calculations for direct materials, wages by department, variable and fixed overheads, and the total cost of the job. Additionally, it explains how to determine the selling price to achieve a 25% profit margin based on the total cost.

Uploaded by

charleschirwa477
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

Problem!.

The following direct costs were incurred on Job No. 415 of Standard Radio Company.

Materials Rs. 4,010 Wages: Deptt. A - 60 hours @ Rs. 3 per hr. B - 40 hours @ Rs. 2 per lu·. C - 20 hours
@ Rs. 5 per hr. Overhead expenses for these three departments were estimated as follows: Variable
overheads: Deptt. A Rs. 5,000 for 5,000 labour hours B Rs. 3.000 for 1,500 labour hours C Rs. 2,000 for
500 labour hours Fixed overheads: Estimated at Rs. 20,000 for 10,000 normal working hours. You are
required to calculate the cost of Job 415 and calculate the price to give profit of 25% on selling price. (B
COlll. Madu/"w)

1.12 Methods al/d Techniques of Cost Accountillg

Solution

Direct Materials: Wages-Deptt. A -W hrs. x Rs. 3 B --40 hrs. x Rs. 2 C -20 hrs. x Rs. 5 Variable Overheads:
Deptt. A-60 hrs. @ Re. I B-40 hrs. @ Rs. 2 C-20 hrs. @ Rs. 4 Fixed Overheads: 120 hours @ Rs. 2 Total
Cost

Job Cost Sheet Job No.4 IS

Profit-25% on Selling Price* Selling Price

*Working Notes:

I. Computation of overhead rates

Variable overheads per labour hour = Overhead + Labour hours Department A = Rs. 5,000 + 5,000 hrs. =
Re. I Department B = Rs. 2,000 + 1,500 hrs. = Rs. 2 Department C = Rs. 2,000 + 500 hrs. = Rs. 4 2. Fixed
overheads = Rs. 20,000 + 10,000 hrs. = Rs. 2 3. Suppose selling price = Rs. 100 Profit = Rs. 25 Cost = Rs.
75

25 I Therefore Profit is 75 or "3 of cost.

You might also like