Question:
A factory uses a job costing system. The following data are available from the books at the year ending on 31st March 2007.
|
Particulars
|
Amount [Rs]
|
|
Direct Materials
|
180,0000
|
|
Direct Wages
|
150,0000
|
|
Profit
|
121,8000
|
|
Selling and Distribution Overheads
|
105,0000
|
|
Administrative Overheads
|
84,0000
|
|
Factory Overheads
|
90,0000
|
Required:
A. Prepare a job cost sheet showing the prime cost, works cost, production cost, cost of sales and sales value.
B. In the year 2007-08, the factory has received an order for a number of jobs. It is estimated that the direct materials would be Rs.240,0000 and direct labor would cost Rs.150,0000. 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 have gone up by 15%. The factory recovers factory overhead as a percentage of direct wages and administrative and selling and distribution overhead as a percentage of works cost, based on the cost rates prevalent in the previous year.