MarkTrucks Limited has some idle capacity in its plant, which isrestored by accepting order from other automobiles industries. Thecompany has finished assembly of 150 trucks against special orderN, 13A from Western Motors Limited. The pertinent data are asunder:
Started October 3,2008.
Finished November 2,2008.
Departments Material cost (Rs) Labor hoursRate per labor hours (Rs)
Assembly 150,000 4,50018
Painting 75,000 1,20015
Finishing 45,000 60012
Factory pay roll for the year isexpected to amount Rs.1, 281,000.
Factory overhead for the year isestimated at Rs 1776, 000.Departmental break-up is providedbelow:
Departments Pay rolls (Rs.) Factory overhead (Rs.)
Assembly 972,0001296,000
Painting 225,000375,000
Finishing 84,000105,000
Factory overhead is based ondirect labor hours. The component inventory has been supplied byWestern Motors Limited. But the other material has been added bythe company.
Theagreed price to be charged is cost plus 20% mark-up, subject to amaximum charge of Rs.5, 000
Pertruck
Required:
1. Prepare a JobCost Sheet for Job No.13A, following proper format
2. Pass thenecessary Journal entries and prepare T account ofWork-In-Process.
3. Calculate Costper unit.
4. Calculate Totalgross profit.