Question 1 (20 marks)

ABC Company uses a job order costing system, building a specialized kitchen cabinet. The following costs were incurred for Job Number 118 in the month of December 2018:

1. Direct material

10,000 square meters of wood costing RM50.00 per square meter were purchased on account. This material was immediately sent to the stores. Materials requisition note issued for this job were 400 square meters.

2. Direct labor

Direct labor is paid at the rate of RM12.00 per hour. The labor hours recorded in the job time record showed 2,000 hours.

3. Manufacturing overhead

Overheads are absorbed using the predetermined manufacturing overheads absorption rate at RM5.00 per direct labor hour.

4. Non-manufacturing overhead

Other non-manufacturing overheads are incurred for the job based on 20% of direct costs.

Job Number 118 was completed and transferred to finished goods at the end of December. The profit required for the job at total costs mark-up 30%.

Required:

1. Compute the following costs in the job cost sheet:

1. Direct material
2. Direct labor
3. Manufacturing overhead
4. Non-manufacturing overhead

2. Determine the quoted selling price for the completed Job Number 118 to the customer.