1.

The following direct costs are incurred on job 430

of Classic Radio Company:
Materials – Rs 4010
Wages: Dept A – 60 hrs – Rs3 per hour
Dept B – 40 hrs – Rs. 2 per hour
Dept C – 20hrs – Rs. 5 per hour

Overheads for these three departments were estimated as follows:

Variable overheads:
Dept A – Rs. 5000 for 5000 labour hours
Dept B – Rs 3000 for 1500 labour hours
Dept C – 2000 for 500 labour hours

Fixed overheads: Estimated at Rs20000 for 10000 normal working hours.

You are required to calculate the cost of Job 430 and calculate price to give profit of 25% on selling price.

Job cost sheet to determine cost og the job and profit ?

Working Note : rate per hour = overhead cost/ total labour h

Crossmultiply technique
Dept A 5000
?

Working Note : Overhead cost = Actual labour hours * overh

Dept A 60*1
Dept B 40*2

Working Note : Rate per hour of fixed overhead = overhead

Crossmultiply technique
or
Formulae

20000
?

Overhead cost = Actual labour hours * overh

 Cost sheet for Job no. 430

Particulars Amount Amount

Material 4010
Direct wages
Dept A 180
Deep B 80
Deep C 100
360
Prime Cost 4370
Overheads
Variable 220
fit of 25% on selling price. Fixed 240
Total Cost 4830
Profit on Cost 1609.839
Selling Price 6439.839

rate per hour = overhead cost/ total labour hours

or
Crossmultiply technique
5000
1

Overhead cost = Actual labour hours * overhead rate per hour

Rate per hour of fixed overhead = overhead cost/ normal working hours

Crossmultiply technique

10000
1

Overhead cost = Actual labour hours * overhead rate per hour

Working Note :Rate per hour of overhead = overheads/ total labour hour

Dept x 1
Dept y 0.5
z 0.625

Overhead Cost = Actual labour hours*rate per hour

deptx 1000 1 1000
depty 2000 0.5 1000
deptz 5000 0.625 3125
5125
Cost sheet for the job no. 58

Particulars Amount Amount

Material
Department X 8000
Y 1000
Z 500
total 9500
(scrape)
x 1000
y 150
z 100
total -1250
8250
Direct Wages
X 1000
Y 3000
Z 10000
14000
Prime Cost 22250
Overheads 5125
Total Cost 27375
 1.     A factory uses a job costing system. The following data are available from the books at the year ending 31.3
Particulars Amount (INR)
Direct Material 900000
Direct wages 750000
Profit 609000
Selling and distribution
525000
overhead
Administrative
420000
overhead
Factory overhead 450000
Required:
1.     Prepare a cost sheet indicating the prime cost, works cost, production cost, cost of sales and sales value
2.     In 2010-11, the factory has received an order for a number of jobs. It is estimated that the direct materi
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 overhead has 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.

Cost sheet for the year 2010

particulars amt
Direct material 900000
direct wages 750000
Prime cost 1650000
factory o/h 450000
factory cost 2100000
admin o/h 420000
cost of production 2520000
selling and distribution 525000
total cost 3045000
profit 609000
sales 3654000

Estimation
factory o/h / Direct wages
450000/2100000*100
60

admin o/h / Works cost

420000/ 2100000*100
20

Selling and distribution/ works cost

525000/2100000*100
25
add 15% of 25% 3.75
28.75
lable from the books at the year ending 31.3.2010.

roduction cost, cost of sales and sales value.

of jobs. It is estimated that the direct materials would be INR 1200000, and direct labour would cost INR 750000.
ate of profit on sales,

inistrative and
ost rates prevalent in the previous year.

Estimated cost sheet

particulars amt
Direct material 1200000
direct wages 750000
Prime cost 1950000
factory o/h 450000
60% of 750000 450000
Factory Cost 2400000
Admin o/s
20%of 2400000 480000
Cost of production 2880000
Selling and distribution
28.75% of 2400000 690000
Total Cost 3570000
Profit (20%) 714000
Sales 4284000
r would cost INR 750000.
Estimated Cost Sheet

Particulars Amount
Direct Material 2000
Direct labour 8000
Prime Cost 10000
Factory o/h
120% of 8000 9600
Factory Cost 19600
Admin o/h
20% of 19600 3920
cost of production 23520
selling and distribtion
15% of 23520 3528
Total Cost 27048
profit 20% on 27048 5409.6
Sales 32457.6