You are on page 1of 4

Job and Batch Costing

1. Mayur Engineering, engaged in job work, has completed all jobs in hand on 30th
December , 1996, except Job No. 447. The cost sheet on 30th December, showed
direct materials and direct labour costs of Rs.40,000 and Rs.30,000 respectively
as having been incurred on Job No.447.

The costs incurred by the business on 31st December, 1996 the


last day of the accounting year, were as follows:

Direct Materials ( Job No. 447) Rs.2,000


Direct labour (Job No. 447) Rs.8,000
Indirect labour Rs.2,000
Miscellaneous factory overhead Rs.3,000

It is the practice of the business to make the jobs absorb factory overheads on the
basis of 120% of direct labour cost.

Calculate the cost of work-in-progress of Job No.447 on 31st December,1996.

2. From the following particulars, prepare the cost sheet for Job No. 225 and find out
the value o job.

Direct materials used for the job Rs.8,500


Productive wages Rs.12,100
Direct expenses Rs.760

Charge 60% of productive wages for factory overheads and 20% of works cost for
office overheads. Profit to be earned on selling price is 20%.

3. The information given below has been taken from the costing records of an
Engineering works in respect of Job No. 555

Direct materials Rs.5,750


Wages :
Dept. X: 100 hours @ Rs.5 per hour
Dept. Y: 50 hours @ Rs.3 per hour
Dept. Z: 30 hours @rs.2 per hour
Variable overhead for these departments were estimated as follows:
Dept. X: Rs.4,000 for 8,000 labour hours
Dept. Y: Rs.3,000 for 4,500 labour hours
Dept. Z: Rs.5,000 for 5,000 labour hours
Fixed overhead is estimated as Rs.25,000 for 20,000 normal working hours.
You are required to calculate the cost of the job and price to be quoted to give a profit of
25% on selling price.
Economic Batch Quantity

4. Compute the economic batch quantity from the following details

Actual demand for the parts – 4,000 units


Setting up cost Rs.100
Cost of manufacture per unit Rs.2,00
Rate of interest per annum 10%

5. Compute the economic batch quantity for a company using batch costing with the
following information.

Monthly demand for the component 2,000 units


Set up cost per batch rs.120
Annual rate of interest 6%
Cost of manufacture per unit Rs.6

Illustration7
The following data have been extracted from the Books of M/s Moon Shine
Industries Ltd. for calendar year 1997

Opening stock of raw materials 25,000


Purchase of raw materials 85,000
Closing stock of raw materials 40,000
Carriage inward 5,000
Wages: Direct 75,000
Indirect 10,000
Other direct charges 15,000
Rent & rate: Factory 5,000
Office 500
Indirect consumption of materials 500
Depreciation: Plant 1,500
Office furniture 400
Salary: Office 2,500
Salesman 2,000
Other factory expenses 5,700
Managing directors remuneration 12,000
Other office expenses 900
Other selling expenses 1,000
Traveling expenses of salesman 1,100
Carriage and freight 1,400
Sales 2,50,000
Advance income tax paid 15,000
Advertisement 2,000

Managing director’s remuneration is to be allocated in the ratio of


2:1:3 for factory, Office and Sales Department respectively.

From the above information prepare the different phases of Cost & Net Profit.

Illustration8

The following figures are extracted from the books of Fashions Ltd., for
the year-ended 30.9.1994. Prepare a cost sheet shoeing clearly the cost per unit under
various elements, direct and indirect cost and also the profit/loss per unit

Direct material 24,00,000


Direct labour 5,00,000
Depreciation of factory building 15,000
Branch office expenses 40,000
Depreciation of office building 8,000
Depreciation of staff cars 12,000
Insurance of staff cars 1,500
Insurance of office Building 1,200
Insurance of factory building 1,500
Delivery van maintenance and running expenses 10,000
Salaries including ( sales manager- Rs.25,000 and
Factory engineer – Rs.25,000) 3,00,000
Finished goods warehouse expense 20,000
Electricity (including Rs.4,000 for Admn. Office) 40,000
Advertisement 20,000
Sundry factory expenses 3,40,000
Sales promotion 5,000
Office administration expenses 50,000
Expenses for participating in Industrial exhibition 10,000
Sales 42,00,000
Unit produced 1,000

You might also like