Question $2$

Wooden Train $($Cost Card$)$

The estimated costs for the production of one handmade train is set out as shown below:

Direct Materials

Wood: $5$ metres at a cost of $2\mathrm{.}50$ per metre

Paint: $0\mathrm{.}1$ litre at a cost of $10\mathrm{.}00$ per litre

Direct Labour

Cutting and Assembly department: $0\mathrm{.}5$ hours at a cost of $6\mathrm{.}00$ per hour Painting department: $1\mathrm{.}0$ hour at a cost of $7\mathrm{.}00$ per hour

Direct Expenses

Licence fee at a cost of $2\mathrm{.}00$ per train

Indirect expenses $($overhead costs$)$

Production overheads $1\mathrm{.}5$ direct labour hours at a cost of $10\mathrm{.}00$ per hour

Administration, selling & distribution costs are to be $20\%$ of total production cost.

Profit is to be charged at $30\%$ of total costs

Required:

Prepare a detailed cost card showing all costs, profit and selling price of the wooden train with full workings.