Question
A small factory presents the following per unit cost for Job # 421 to determine the selling price Materials Tk. 70.00 Direct wages (18 hours
A small factory presents the following per unit cost for Job # 421 to determine the selling price
Materials Tk. 70.00
Direct wages (18 hours @ Tk. 2.50 per hour) Tk. 45.00
( Dept. A 8 hours, Dept. B, 6 hours Dept. C, 4 hours)
Chargeable expenses (special stores items) Tk. 5.00
Tk. 120.00
Add 33.33% for expenses Tk . 40.00
Total Tk. 160.00
Analysis for the Profit & Loss Account for the current year
Sales less returns Tk. 250,000.00
Materials Tk. 150,000.00
Direct wages (Dept. A Tk. 10,000.00 +Dept. B Tk. 12,000.00+Dept. C Tk. 8,000.00) Tk. 30,000.00
Special Store items Tk. 4,000.00
Overheads Dept.( A Tk.5,000.00+ Dept. B Tk. 9,000.00+ Dept. C Tk 2,000.00) Tk. 16,000.00
Tk.200,000.00
Gross profit Tk. 50,000.00
Selling expenses Tk. 20,000.00
Net Profit Tk. 30,000.00
It is also noted that average hourly rates for the 3 departments A, B &C are similar. Direct labour hour method is followed to absorb overheads
Required:
Calculate revised cost for the current year using actual figures as basis and add 20% to total costs to determine selling price
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