Answer to Question #149858 in Accounting for kingue

Question

2. The information given below has been taken from the costing records of an Engineering works in respect of Job No. 303.
Materials Sh. 41,100
Wages:
Department A – 60 Hours at Sh.300 per hour
Department B – 40 Hours at Sh.200 per hour
Department C – 20 Hours at Sh.50 per hour
Overhead expenses for these three departments were estimated as follows:
Variable overheads:
Department A – Sh.50,000 for 5,000 labour hours
Department B – Sh.30,000 for 1,500 labour hours
Department C – Sh.20,000 for 500 labour hours
Fixed overheads:
Estimated at Sh.200,000 for 10,000 normal working hours.
Required:
i) Calculate the cost of job 303

Answer 1

SOLUTION TO QUESTION Q149858

COST SHEET JOB NUMBER NO 303

Direct materials Sh. 41,100

Add wages: Department

A =60 hrs*Sh. 300/hr= Sh. 18,000

B =40hrs*Sh. 200/hr= Sh. 8,000

C=20hrs*Sh.50/hr= Sh. 1,000

Total wages Sh. 27,000

Prime cost(Direct material+Wages) Sh. 68,100

Add Overhead variables: Department

A =60 hrs*Sh. 10/hr= Sh. 600

B =40hrs*Sh. 20/hr= Sh. 800

C=20hrs*Sh.40/hr= Sh. 800

Total overhead costs Sh. 2,200

Fixed costs overhead (60+40+20)*Sh. 20/hr Sh. 2,400

Total job cost Sh. 72,700