Example of batch costing, Cost Accounting

Example of Batch Costing

The budgeted variable overheads of a company for the year of 2001 are as given as:

Department                Overhead (shs.)                                   Absorption base

A                                  150,000                                               15,000 direct labour hours

B                                  200,000                                               25,000 direct labour hours

C                                  120,000                                               20,000 direct labour hours

D                                  300,000                                               30,000 machine labour hours

Additional Information

  1. Selling and administering overheads are changed at 10 percent of total production costs whereas the profit mark up is 25 of net costs:
  2. An order for 2,000 units was obtained from a customer. The batch number of its order is 510. The given additional information in respect of its batch is given below as:
  3. Direct materials - 87,000/-
  4. Direct Labor - Dept A (150 direct labor hrs) - 12shs. Direct labor hour.
  5. Dept B (40 direct labor hrs) @ 15shs. Per hr
  6. Dept C (60 direct labor hrs) @20shs. Per hr
  7. Dept D (100 direct labor hrs) @10shs. Per hr

A total of 50 machine hours were employed in this job

Required

a) Calculated the net cost of the batch

b) Cost/Unit

c) Selling Price of the batch

d) Selling Price unit

 Solution

Particulars

 

   Shs.

D Materials

 

 

D Labour:

Dept A (150 x 12)

1,800

 

Dept B (40 x 50)

6000

 

Dept C (60 x 20)

1,200

 

Dept D (100 x 10)

1,000

Prime Cost

 

 

 

 

 

Variable Overheads:

Dept A -15,000/15,000 x 150

1,500

 

Dept B - 200,000/25,000 x 40

320

 

Dept C - 120,000/20,000 x 60

360

 

Dept D - 300,000/300,000 x 50

500

Total Production Cost

 

94,280

Selling and admin costs - 10% (94,280)

 

   9,428

Total Costs

 

103,708

Mark-up: Mark-up @ 25% x 103,708

 

  25,927

Cost/Unit = 103,708/2000 units = 51.854

Selling Price unit = 129,635/2,000 = 64.8175

 

Posted Date: 2/7/2013 2:21:55 AM | Location : United States







Related Discussions:- Example of batch costing, Assignment Help, Ask Question on Example of batch costing, Get Answer, Expert's Help, Example of batch costing Discussions

Write discussion on Example of batch costing
Your posts are moderated
Related Questions
1.    Provide at least three characteristics of a corporation (in your own words).   2.   The date on which a cash dividend becomes a binding legal obligation is known

This is difficult to perceive cash maintained in the vault as an investment. Fairly, you would be thinking that if we invest cash, then how can cash itself be an investment? Howeve



Gustav Ltd commenced operations on 1 July 2011 and presents its first statement of comprehensive income for the year ending 30 June 2012 and first statement of financial position a

Requirement for additional Funds A business would require additional capital for two purposes: 1. Financing additional fixed assets, and

Cash Budget - Budgetary Planning and Control This can records the cash outflows and inflows that are expected to take place in respect of every functional budget. This may be

How does functional classification of overheads like Manufacturing overhead,Administrative overhead affect product cost or profit?

Candler Inc a computer software development firm has stock outstanding as follows: 40,000 shares of $2 nonparticipating, noncumulative preferred stock of $10 par, and 250,000 share

1.Assume that Abel business corporation is purchasing new equipment, for 350,000$ at the beginning of 2014. Assume that Abel business corporation is in the 30% corporate tax bracke