Factory overhead is based on direct labor hours the

Assignment Help Accounting Basics

Reference no: EM13613867

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 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.

Reference no: EM13613867

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