Northrise University

30029 Kitwe - Ndola Dual Carriage Highway. P.O Box 240271, Ndola, Zambia.

ASSIGNMENT COVER SHEET

Student ID: 1905504

Student Name: Patrick Chibabula

Course Code: ACC203

Course Title: Cost Accounting

Instructor Name: Mr. Steven Sikobela

Essay/Assignment Title: Final Course Assignment

Due Date: 25th June, 2020

Declaration:
I acknowledge that submitting this document binds me to the following:
To the best of my knowledge, I assert that no part of this assignment has been copied from the work of anyone else, be it another stude
or any other author or from any source except where due credit is given in the text below, or has been written for me by someone else
except where the relevant instructors and authorities have explicitly permitted such collaboration .

SIGNATURE: P. Chibabula

Instructor’s Comments:

GRADE [ ]
Final Course Assignment 2

Job Order Costing

Costing is an accounting technique used to determine the exact expenses for materials, labor

and overhead incurred in operations. Job order costing records the actual materials and labor

expenses for specific jobs, and assigns overhead to jobs at a pre-determined rate (Drury, 2008).

Therefore, the following are the circumstances in which job order costing is used.

This costing method is usually adopted when the manufacturer produces a variety of

products which are different from one another and needs to calculate the cost for doing an

individual job. Job costing includes the direct labor, direct materials, and manufacturing

overhead for that particular job (Trade Finance Global, 2020).

Further, job order costing is useful for determining the profitability of a product. It helps

the company make estimates about the value of materials, labor, and overhead that will be spent

while doing that particular job. Efficient job order costing helps companies to create quotes that

are low enough to be competitive but still profitable for the company (Vukadin, 2019).

Job order costing is used when the company wishes to determine the usage of fixed

assets, such as manufacturing equipment. Since machine costs are distributed amongst different

jobs, the identification of this cost is important to know the cost of the job. This helps determine

the amount of overhead allocated to each asset and distribute it fairly between the jobs in the

company (Lucy, 2009).

In conclusion, Job order costing is a system of expense monitoring in which a business

only creates products to fill customer or client orders. Employees complete job order cost sheets

for each order and usually separate expenses into three main categories: direct material, direct

labor and manufacturing overhead. Companies in many industries can use job order costing,

though a variety of product offerings or services complicates the tracking of expenses.

Final Course Assignment 3

   Overhead Analysis Sheet    

Production Departments Service Departments

Details Preparation Assembly Finishing Maintenance Handling Totals

K
Overhead K K K K 8,000 K
cost Basis’% 180,000 96,000 84,000 12,000 380,000

Maintenance 60:10:30 7,200 1,200 3,600 (12,000) - -

Handling 40:30:30 3,200 2,400 2,400 - (8,000) -
- - - - - - - -
Totals 190,400 99,600 90,000 - - 380,000
Calculation of Total Cost of Job #35

Calculation of Overhead Absorption Rates for the Production Departments

Capacity Utilization.

Machine hours:

Preparation Department = 40hours

Labor hours:

Assembly = 120hours

Finishing = 120hours

Solutions.

Rates per machine hour (Preparation Dep): 190,400/40 = K4,760 per machine hour

Rates per labor hour (Assembly Dep): 99,600/120 = K830 per labor hour

Rates per labor hour (Finishing Dep): 90,000/120 = K750 per labor hour

Hence, the Rates for each Department in the Production Department are as follows

Preparation Department = K4,760 per machine hour

Assembly Department = K830 per labor hour

Finishing Department = K750 per labor hour

Final Course Assignment 4

Job Cost Card

Name of Company: Henry Mulenga Ltd

Job Number #: 35

Requisition Number: 1.00

Verified By:  Patrick Chibabula

Details K K
Direct Material 410,000

Direct Labor:
Assembly Dep; (4hrs x K2,200) 8,800
Finishing Dep; (5hrs x K2,200) 11,000 19,800
429,800
Add; Direct Expenses 166,000
Prime Costs 595,800
Overheads:
Preparation Dep; (3hrs x K4,760) (as a wage of the (m) minder) 14,280
Assembly Dep; (4hrs x K830) 3,320
Finishing Dep; (5hrs x K750) 3,750 21,350
Production Cost 617,150
Administrative and Selling overheads (20% x K617,150) 123,430
Add; Distribution quotes from haulage company 150,000
Total Cost 890,580

Therefore, the total cost for Job 35 = K890,580

The Expected Selling Price for Job 35 Provided the Profit Margin is 25%

Data

Total Cost = K890,580

Profit Margin = 25%

Solutions

Profit: K890,580 x 0.25 = K222,645

Selling Price = Total Cost + Profit
Selling Price = K890,580 + K226,929

Therefore, Selling Price = K1,113,225

Final Course Assignment 5

Journal Entries for Job #35

K
Dr K
Details F. L Cr
Direct Material inventory 410,000.00
Accounts Payable 410,000.00
To record purchase of direct materials c/b 410,000.00 410,000.00

Work in progress inventory 436,870.00

Direct material 410,000
Wages payable 19,800
Factory overheads 7,070
To transfer raw materials to production, record
direct labor cost on the job and apply overheads at
the predetermined rate. c/b 436,870.00 436,870.00

Working in progress inventory 166,000.00

Raw material inventory 166,000.00
To record requisition of special design drawings for
WIP inventories c/b 166,000.00 166,000.00

Factory overhead costs

14,280
Wages payable 14,280
To record indirect labor for WIP inventories c/b 14,280 14,280

Finished Goods inventory 617,150

Work in progress inventory 617,150
To recognize completion of job #35 c/b 617,150 617,150

Conclusion

Job order costing is a cost accounting system in which direct costs are traced and indirect

costs are allocated to unique and distinct jobs instead of departments. It is appropriate for

businesses that provide non-uniform customized products and services. Job order costing is one

of the two main cost accounting systems, the other being the process costing in which costs are

traced and allocated first to different processes carried out in different departments and then to
Final Course Assignment 6

products and services. Many companies use costing systems that are a blend of features of both

job-order costing and process costing systems (Vukadin, 2019).

References

ACCA. (2016). Finacial Reporting F7. Aldine Place, London: BPP, Learning Media.
Drury, C. (2008). Cost and Management Accounting. Handover Hemsphire UK: Cengage Media.
Lucy, T. (2009). Costing and Quatitave Techniques. Lagos, Nigeria: V1 Publishers.
Trade Finance Global. (2020, April 23rd ). Retrieved from Google Scholar:
http://www.TradeFinanceGlobal.com
Vukadin, O. (2019, May 25). Bririant.org. Retrieved from Google scholar:
http//www.bririant.org