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Wankky Company worked on only two jobs during August. Information on the jobs is given below: Job 01 Job 02 Direct material $80,000 $92,000 Direct

Wankky Company worked on only two jobs during August. Information on the jobs is given below:

Job 01

Job 02

Direct material

$80,000

$92,000

Direct labour

287,000

219,000

Direct manufacturing labour-hours (DMLH)

21,000

13,300

At the beginning of the year, annual manufacturing overhead (MOH) was budgeted at $3,780,000 and Wankky budgeted 35,000 DMLH per month. Job 01 was completed in August.

Required:

  1. Compute the total cost of Job 01. (10 marks)

Job 01

Direct material

80,00

Direct labour

287,000

Manufacturing overhead applied

  1. Calculate per unit cost for Job 01 assuming it has 3,300 units. (3 marks)

  1. Some business use job order costing and others process costing. What is the difference between these two costing systems? What companies use job costing? What companies use process costing? Briefly explain. (12 marks)

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