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BBA 6th

The document provides information about job order costing for Frog Machine Works. It includes direct material and labor costs for job 642, and calculates the total manufacturing cost and sale price of the job by adding a 40% markup to the total cost.

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Fazal Wahab
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425 views3 pages

BBA 6th

The document provides information about job order costing for Frog Machine Works. It includes direct material and labor costs for job 642, and calculates the total manufacturing cost and sale price of the job by adding a 40% markup to the total cost.

Uploaded by

Fazal Wahab
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
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Chapter 5

JOB ORDER COSTING

Question: 2

Frog machine works collects its cost data by the job order cost accumulations procedure.
For job 642 the following data are available:

Direct Materials: DIRECT LABOUR

9/14 issued……………..$1,200 Week of sept 20--- 180hrs@ $6.20/hrs.

9/20 issued…………….. 662 week of sept 26 ---140 hrs. @7.30/hrs.

9/22 issued…………….. 480

Factory overhead is applied at the rate of 3.5 per direct labor hour

Required:

(1) The appropriate information entered on a job order cost sheet.


(2) The sale price of the job, assuming that it was contracted with a markup of 40%of cost

Answer:

Requirement: 1 FORGE MACHINE WORKS

Job order cost sheet –job 642

Direct Materials:
9/14 issued 1200
9/20 issued 662
9/22 issued 480 2342

DIRECT LABOUR :
sept 20 180*6.20 1116
sept 26 140*7.30 1022 2138
Factory overhead Cost:
sept 20 180*3.50 630
sept 26 140*3.50 490 1120
Total manufacturing 5600
Requirement: 2

Here markup means profit so the sale price will be 5600+40%of 5600

Calculation:

Cost = 6500

(+) Markup 5600*40/100 = 2240

Sale price = 7840


Problem no: 5-1

Tedyuscung Company produce special machines made customer specification. The following data
pertain to job 1106:

Customer: Markem machine shop Date of started: 11/4/19---

Customer’s order no: C696 Date of finished: 11/18/19----

Date: October 27 Total cost to manufacture?

Description: 18 drilling machine Sale price: $20,425

WEEK ENDING 11/11(1 st week) WEEK ENDING 11/18(2 nd week)

Material used, Dep1…………………………. $2,400 $1300

Direct Labor rate, Dep1……………………. $8.20 per hour $8.20 per hour

Labor hours used Dep1……………………..300 200

Direct labor rate, Dep2……………………..$8.00per hour $8.00per hour

Labor hours used, Dep2……………………..150 70

Machines hours, Dep2………………………..200 120

Applied factory overhead, Dep1…………. $4.00 per labor hour $4.00 per labor hour

Applied factory overhead, Dep2…………$1.80 per Machine hour $1.80 per Machine hour

Marketing and Administrative cost are charged to each order at a rate of 25% of the cost to
manufacturing.

Required:

A suitable cost sheet showing the above data. Did the company make an adequate profit margin on
this order?

SALOUTION:

JOB ORDER COST SHEET

Customer: Markem machine shop: JOB 1106

Customer’s order no: C696: Description: 18 drilling machine

Direct Material Cost (dep-1):

1st week cost 2400


2nd week cost 1300 3700
Direct Labor Cost (dep-1):
1st week cost ( 300*8.20) 2460
2nd week cost (200*8.20) 1640 4100
Direct Labor Cost (dep-2):

1st week cost (150*8) 1200


2nd week cost (70*8) 560 1760
F O H COST (DEP-1):

1st week cost (300*4) 1200


2nd week cost (200*4) 800 2000
F O H COST (DEP-1):

1st week cost (200*1.80) 360


2nd week cost (120*1.80) 216 576
Total Manufacturing cost 12136

Requirement 2:

Tedyuscung Company

Income statement

For the year ended…….

Sale 20425
(-) Cost (12136)
Gross profit 8289
(-)Marketing &administrative Exp 25%of total cost
(12136*25/100) 3034
Profit Margin 5255

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