Questions:
Frames Ltd produces wooden window frames to order for the building industry. The size of frame depends on the specification in the contract. For the purposes of providing job cost estimates the size of frame is ignored and the job cost estimate is based on the type of frame produced, being either single-glazing or double-glazing. The standard specification is as follows:
|
|
Single-glazing
£
|
Double-glazing
£
|
|
Direct materials per unit
|
90.00
|
130.00
|
|
Direct labour per unit
|
|
|
|
6.5 hours at £5.00 per hour
|
32.50
|
|
|
8.0 hours at £5.00 per hour
|
|
40.00
|
|
Variable production overhead charged at £6 per hour
|
39.00
|
48.00
|
|
|
|
|
|
Fixed overhead is estimated at £160,000 per month for single-glazing and £100,000 per month for double-glazing. Estimated production per month for single-glazing is 4,000 units and for double-glazing is 2,000 units per month.
Required
Prepare a job cost estimate for a customer who intends to order 500 single-glazed and 200 double-glazed units.