Chapter 8: Job & Batch Costing - Ibrahim Sameer · PDF fileChapter 8: Job & Batch Costing 2016...

Chapter 8: Job & Batch Costing 2016

1 Ibrahim Sameer Bachelors of Business – Finance (CMA – Cyryx College)

Cost & Management Accounting

Bachelors of Business (Specialized in

Finance) – Study Notes & Tutorial

Questions

Chapter 8: Job & Batch Costing





















Practice Questions

Question 1



Question 2

Question 3



Question 4



Question 5



Question 6



Question 7

Question 8

Question 9

Question 10



Question 11

Question 12



Question 13

Question 14

A furniture making business manufactures quality furniture to customers’ orders. It has three

production departments (A, B, & C) which have OAR (per direct labour hour) of $12.86, 12.40

& 14.03 respectively.

Two pieces of furniture are to be manufacture for customers. Direct costs are as follows.

Job XYZ Job MNO

Direct material $154 $108

Direct labour 20 hours dept A 16 hours dept A

12 hours dept B 10 hours dept B

10 hours dept C 14 hours dept C

Labour rates are as follows: $3.80 (A); $3.50 (B); $3.40 (c).

Calculate the total cost of each job.



Question 15

A company operates a job costing system.

The estimated costs for job 173 are as follows.

Direct materials 6 metres @ $22 per metre

Direct labour 15 hours @ $9 per hour

Variable production OH are recovered at the rate of $3.50 per direct labour hour.

Fixed production OH for the year are budgeted to be $300,000 and are to be recovered on the

basis of the total of 50,000 direct labour hours for the year.

Other OH, in relation to selling and distribution and administration, are recovered at the rate of

$85 per job.

Calculate the total cost of Job 173.



Question 16

Annie is to set up a small hairdressing business at home. She anticipates working a 40 hour week

and taking four weeks’ holiday per year. Her expenses for materials and OH are expected to be

$3,500 per year, and she has set herself a target profit of $19,000 for the first year.

Assuming that only 90% of her working time will be chargeable to clients, what price should she

charge for a ‘colour and cut’ which would take 3 hours?

Question 17

The following information relates to a management consultancy organization.

Particulars $

Salary cost per hour for senior consultants 45

Salary cost per hour for junior consultants 30

OAR per hour applied to all hours 25

The organization adds 40% to total cost to arrive at the final free to be charged to a client.

Assignment number 789 took 55 hours of a senior consultant’s time and 120 hours of junior

consultant’s time.

What is the final fee to be charged for Assignment number 789?

Question 18



Question 19

Question 20

Question 21

Question 22



Question 23

Question 24



Question 25

Question 26



Question 27



Question 28

Question 29



Question 30



Question 31





Question 32



Question 33

Ahmed Company private limited make tables for different schools in Maldives. Recently they have

signed an agreement with Ministry of Education in Maldives to supply tables for different schools in

atolls. Ahmed Company private limited has the following budgeted overheads for the year 2015, based on

normal level of operations.

Production department Budgeted Overheads Budgeted activity level

Cutting MVR 20,000 5,000 labour hours required

Assembling & furnishing MVR 30,000 3,000 labour hours required

Ahmed Company private limited selling and administrative overheads are 15% of prime cost. An order

for 1,000 tables have been place by Ministry of Education, made as Batch 6040, and incurred the

following costs.

Materials MVR 45,000

Labour 300 hours in the cutting department at MVR 6 per hour

500 hours in the assembling and finishing department

at MVR 12 per hour

MVR 2,000 was paid for the hire of axe for cutting the woods.

Task

Calculate Ahmed company private limited the cost per unit for batch 6040.Your final answer should be

given 2 decimal places.



Question 34

Maureen Ltd work order for 1,000 units of product passes through three machines for which the machine

hours rates are as follows:

Name of the machine MVR

Machine A 5

Machine B 6

Machine C 8

Material cost of work order 38,000

Wages 5,0000

Machine A worked for 400 hours

Machine B worked for 600 hours

Machine C worked for 500 hours

Upon completion of work order, material worth MVR 2,000 were returned to stores. Office overheads are

to be charged at 60% of work cost. 10% of the production going to be discarded, being unsatisfactory for

which ½ the amount can be realised from sale in the market. 20% profit on selling price is desired.

Task

Using the above information draw up Maureen Limited Extract of standard cost card.



Question 35

The following data is extracted from the books of TEP Company Private Limited for the standard details

for one unit:

Direct materials: 55 square metres @ MVR 7.59/sq m

Direct wages:

Bonding department– 67 hours @ MVR 13.25/hour

Finishing department–40 hours @ MVR 10.20/hour

Budgeted costs and labour

hours per annum: MVR Hours

Variable production overhead:

Bonding department 450,000 625,000

Finishing department 300,000 600,000

Task

Using the above information draw up TEP Construction Company Private Limited Extract of standard

cost card.



Question 36



Question 37



Question 38

Date post:	07-Mar-2018
Category:	Documents
Upload:	ngothuan
View:	242 times
Download:	3 times

Chapter 8: Job & Batch Costing - Ibrahim Sameer · PDF fileChapter 8: Job & Batch Costing 2016...

Documents