Question 1: (10 Marks)

A. Identify an industry where job costing system is applicable. Assume the data as given below related to the production for a month.

a. Purchase of material (specify cash or credit) OMR ________.

b. Materials requisitions:

Job No:___ OMR___

Job No:___ OMR___

Job No:___ OMR___

Job No:___ OMR___

Job No:___ OMR___

c. Direct labour

Job No:___ OMR___

Job No:___ OMR___

Job No:___ OMR___

Job No:___ OMR___

Job No:___ OMR___

d. Indirect material OMR ______

e. Indirect labour OMR ______

f. Factory overhead costs incurred on account OMR ______

g. Depreciation OMR ______

h. Factory overhead applied as percentage of direct labour - ___%

i. Completed jobs: write jobs completed (assume four jobs as completed)

j. Jobs sold: Write jobs sold (assume three jobs are sold and write the selling price each job sold)

Required :( showing the working notes)

i. Compute the cost of the finished jobs (2 Mark)

ii. Compute the cost of work in process (1 Mark)

iii. Compute the cost of the job sold (1 Mark)

iv. Compute the profit on the job sold (1 Mark)

v. Prepare journal (3.5 Marks)

B. What are the limitations of using predetermined overhead absorption for the determination of the cost of a job? Discuss. (1.5 Marks)

Question 2: (5 Marks)

Choose an industry or a company and discuss how standard costing and variance analysis help them for the effective cost control and profit maximization.