Example of batch costing, Cost Accounting

Assignment Help:

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

 


Related Discussions:- Example of batch costing

Prepare the amortization schedule, Logan Corporation issued $800,000 of 8% ...

Logan Corporation issued $800,000 of 8% bonds on October 1, 2006, due on October 1, 2011. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to y

What is the total cost of the work in process, The Cutting Department of th...

The Cutting Department of the Rock Island Custom Cabinetry Corporation (a process costing production) had no work in process at the beginning of the period, 12,000 units were compl

Determine the total cost and product costing method, Question Hornsby M...

Question Hornsby Manufacturing has four categories of overheads. The four categories and the expected overhead costs for each category for next year are as follows:

Student, i asking for start up

i asking for start up

Cost classification bases, Cost Classification Bases Costs can be clas...

Cost Classification Bases Costs can be classified on either more or one of the given bases as: a) Are the costs dependent on the level of output as like variable or are the

Variance analysis and standard costing, Variance Analysis and Standard Cost...

Variance Analysis and Standard Costing Standard costing is defined with CIMA like a technique that uses standards for revenues and costs for the purpose of control via varianc

Direct material, Flying High Company manufactures model airplanes. During t...

Flying High Company manufactures model airplanes. During the month, it manufactured 10,000 airplanes. Each one used an average of 6.5 direct labor hours and an average of 1.5 sheet

Disadvantages of standard costing, Disadvantages of Standard Costing ...

Disadvantages of Standard Costing 1. The system of standard costing is very expensive to install : A lot of money is spent in studying output requirements in terms of materia

Multiple product scenarios, Break-even analysis can be used to work out eit...

Break-even analysis can be used to work out either a break-even volume or revenue, as per given a multiple product scenario. This is achieved using 'average contribution per unit'

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd