Mark Trucks Limited has some idlecapacity in its plant, which is restored by acc

Question

Mark Trucks Limited has some idlecapacity in its plant, which is restored by accepting order fromother automobiles industries. The company has finished assembly of150 trucks against special order N, 13A from Western MotorsLimited. The pertinent data are as under:

Started October 3, 2008.

Finished November 2,2008.

Departments Materialcost (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 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 over head (Rs.)

Assembly 972,000 1296,000

Painting 225,000 375,000

Finishing 84,000 105,000

Factory overhead is based on directlabor hours. The component inventory has been supplied by WesternMotors Limited. But the other material has been added by thecompany.

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

Per truck

Required:

1. Prepare a Job Cost Sheet forJob No.13A,following proper format

2. Pass the necessary Journalentries and prepare T account of Work-In-Process.

3. Calculate Cost perunit.

4. Calculate Total grossprofit.

Explanation / Answer

x.x

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