JOB AND BATCH COSTING

1. From the following particulars, prepare the Cost-Sheet for Job No.75 and find out the value of the job. Materials issued for the job Direct Expenses Production Wages Rs. 6,000 Rs. 500 Rs. 4,600

Provide 60% on productive wages for works on cost and 12.5% on work cost for office on cost. Profit to be realized @ 15% on selling price.

2. A factory uses a job costing system. The following data are available from the books at the year ending 31st March 2011:

Direct Material Direct Wages Profit Selling & Distribution overheads Administrative Overheads Factory Overhead

Rs. 9,00,000 Rs. 7,50,000 Rs. 6,09,000 Rs. 5,25,000 Rs. 4,20,000 Rs. 4,50,000

Required: (a) Prepare a Cost Sheet indicating detailed break-up of cost. (b) In 2011-12, the factory has received an order for a number of jobs. It is estimated that the direct materials would be Rs. 12,00,000 and direct labour would cost Rs. 7,50,000. What would be the price for these jobs if the factory intends to earn the same rate of profit on sales, assuming that the selling and distribution overheads gone up by 15%. The factory recovers factory overheads as a percentage of direct wages and administrative and selling overheads as percentage of work cost, based on the cost rates prevalent in the previous year.

3. A shop floor supervisor of a small factory presented the following cost for Job no. 420 to determine selling price. Rs. Per unit 70 45 5 120 40 160

Material Direct Wages 18 hrs @ Rs. 2.5 (Dep. X 8 hrs, Dep. Y 6 Hrs & Dep. Z 4 hrs) Chargeable expenses Add: 33% for overheads Total Cost

Analysis of P & L AS/c for 2010-11 Shows the following:

Particulars Material used Direct wages x 10,000 Y 12,000 z 8,000 Special stores items Overheads x 5,000 Y 9,000 z 2,000 Selling expenses Net Profit

Amt Particulars Amt 1,50,00 2,50,00 0 Sales 0

30,000 4,000

16,000 20,000 30,000 2,50,00 0

2,50,00 0

It is also noted that average hourly rates for 3 depts. X,Y,Z are similar. Required: (i) (ii) (iii) Draw up a job cost sheet for job no. 420. Calculate the entire revised cost using 2010-11 actual figures. Add 20% to total cost to determine selling price.

4. Following information has been extracted from costing records of Shree Ganesh Engineering Works in respect of Job No. 101. Materials Wages: Dep. A Dep. B Overheads: Variable overheads Dep A Dep B Fixed Overheads Rs. 5,800 100 hours @ Rs. 5 per hour 200 hours @ Rs. 3 per hour

Rs. 10,000 for 5,000 direct labour hours Rs. 30,000 for 10,000 direct labour hours Estimated at Rs. 50,000 for 50,000 normal working hours.

Required: Calculate the cost of Job no. 101 and calculate the price to be charged so as to give a profit of 20% on selling price.

5. A factory uses a Job costing system. The following cost data are available from the books for the year ended 31st March 2011: Direct Material Direct Wages Profit Rs. 9,00,000 Rs. 7,50,000 Rs. 6.09.000 Selling & Distribution overheads Administrative overheads Factory overheads Rs. 5,25,000 Rs. 4,20,000 4,50,000

(a) Prepare a Cost Sheet for the year 2010-11.. (b) In 2011-12, the factory had received an order for a number of jobs. It is estimated that the direct materials would be Rs.12,00,000 and direct labour would cost Rs. 7,50,000. What would be the price for these jobs if the factory intends to earn the same rate of profit on sales, assuming that the selling & distribution cost has gone up by 15%. The factory recovers factory overhead as a percentage of direct wages and administrative and Selling & distribution overheads as a percentage of work cost, based on the cost rates prevalent in the previous year.

6. Leo Ltd. undertakes to supply 1,000 units of a component per month for the months of January, February and March 2011. Every month a batch order is opened against which materials and labour costs are booked at actual. Overheads are levid at a rate per labour hour. The selling price is contracted at Rs. 15/unit. From the following data, present the profit per unit of each batch order and the overall position of the order for 3000 units. Batch Material Labour Months output Cost cost (Numbers) Jan-11 1,250 6,250 2,500 Feb-11 1,500 9,000 3,000 Mar-11 1,000 5,000 2,000 Labour is paid @ Rs.2/hour. The other details are: Months Overheads Jan-11 Feb-11 Mar-11 Total labour hours Rs. 12,000 4,000 Rs. 9,000 4,500 Rs. 15,000 5,000

7. A jobbing factory has undertaken to supply 200 pieces of a component per month for the following 6 months. Every month a batch order is opened against which materials and labour hours are booked at actual. Overheads are levied at a rate per labour hour. The selling price contracted for is Rs. 8/piece. From the following data, present the cost and profit per piece of each batch order and overall position of the order for 1,200 pieces. batch Month output Jan Feb Mar Apr May Jun The other details are: Month Jan. Feb Mar Apr May Jun Chargeable Exp (rs) 12,000 10,560 12,000 10,580 13,000 12,000 Direct Labour (hr) 4,800 4,400 5,000 4,600 5,000 4,800 210 200 220 180 200 220 Material Direct cost Wages (Rs) (Rs) 650 120 640 140 680 150 630 140 700 150 720 160 Direct Labour (hr) 240 280 280 270 300 320

8. A work order for 500 units of a commodity has to pass through four different machines of which the machines hour rates are No. I No. II No. III No. IV Rs. 1.25 3 4 2.50

The following expenses have been incurred on the work order. Materials Rs. 20,000 and wages Rs. 1,500. Machine I Machine II Machine III Machine IV Worked for Worked for Worked for Worked for 200 hours 300 hours 240 hours 100 hours

After the work order had been executed, materials worth Rs. 1,000 were returned to stores. Office overheads are to be estimated @ 60% of work cost: 10% of the production is going to be discarded, being unsatisfactory for which the amount can be realized from sale in the junk market. Find out he rate of selling price per unit if 20% profit on selling price is desired.