Started October 3,2008. Finished November 2, 2008. Departments Material cost (Rs

Question

Started October                 3,2008.

Finished November         2, 2008.

Departments Material cost (Rs)

Labor hours  Rate per labor   hours (Rs)

Assembly                          150,000     4,500     18

Painting                              75,000      1,200     15

Finishing                           45,000          600       12

Factory pay roll for the year is expected to amount

Rs.1, 281,000.

Factory overhead for the year is estimated at

Rs 1776, 000.Departmental break-up is provided below:

Departments    Pay rolls (Rs.) Factoryover head (Rs.)

Assembly         972,000                  1296,000

Painting          225,000                       375,000

Finishing         84,000                       105,000

Factory overhead is based on direct labor hours. The componentinventory has been supplied by Western Motors Limited. But theother material has been added by the company.

The agreed price to be charged is cost plus 20% mark-up, subjectto a maximum charge of Rs.5, 000

Per truck

Required:

           1. Prepare a Job Cost Sheet for Job No.13A,following properformat

           2. Pass the necessary Journal entries and prepare T account ofWork-In-Process.

           3. Calculate Cost per unit.

           4. Calculate Total gross profit.

Explanation / Answer

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