Question
DF Limited is a manufacturing company that carries out jobs to customers requirements in three production departments. The following data is available for Jobs A,
DF Limited is a manufacturing company that carries out jobs to customers requirements in three production departments. The following data is available for Jobs A, B and C.
A B C
Bought in components248 76 -
Direct material from stores 312 32 96
Direct labour hours:
Machining12 18 15
Assembling 6 9 4
Finishing and Spraying 3 2 2
Hourly wage rates:
Machining 12.00
Assembling 8.00
Finishing and Spraying6.00
Production overhead absorption rates per direct labour hour:
Machining26.00
Assembling 21.00
Finishing and Spraying 25
Your cost estimates should include allowances for:
(a) 20% of total production cost for administration overhead
(b) Profit of 12.5% on selling price.
Required:
Calculate the price that should be charged for Jobs A, B and C
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