Mark TrucksLimited has some idle capacity in its plant, which is restored by accepting order from other automobiles industries. The company has finished assembly of 150 trucks against special order N, 13A from Western Motors Limited. The pertinent data are as under:
Started October 3, 2008.Finished November 2, 2008.
Departments Material cost ($) Labor hours Rate per labor hours ($)
Assembly 150,000 4,500 18
Painting 75,000 1,200 15
Finishing 45,000 600 12
Factory pay roll for the year is expected to amount $1,281,000.
Factory overhead for the year is estimated at $1776,000. Departmental break-up is provided below:
Departments Pay rolls ($) Factory over head ($)
Assembly 972,000 1296,000
Painting 225,000 375,000
Finishing 84,000 105,000
Factory overhead is based on direct labor hours. The component inventory has been supplied by Western Motors Limited. But the other material has been added by the company.
The agreed price to be charged is cost plus 20% mark-up, subject toa maximum charge of Rs.5, 000 Per truck.
Required:
1. Prepare a Job Cost Sheet for JobNo.13A,following proper format
2. Pass the necessary Journal entries and prepare T account of Work-In-Process.
3. Calculate Cost per unit.
4. Calculate Total gross profit.