Question 1 You have been asked to calculate a selling price for two jobs: Job TT5 and Job KK2. The details for Job TT5 are as follows:Direct materials: 10 units at N$12.40.Direct labour:20 hours for department A,10 hours for department B12 hours for department CThe labour rates are as follows: N$3.80 (A); N$3.30 (B) and N$3.50 (C).The overhead rates per labour hour, to be used for each department are: N$1.86 (A), N$2.03 (B) and N$0.40 (C).The firm expects a profit of 55% on the total cost. The details for Job KK2 are as follows:Direct materials: 10 units at N$10.80.Direct labour:16 hours for department A10 hours for department B14 hours for department CThe labour rates are as follows: N$3.80 (A); N$3.30 (B) and N$3.50 (C).The overhead rates per labour hour, to be used for each departments are: N$1.86 (A), N$1.03 (B) and N$0.50 (C).The firm expects a profit of 40% on the total cost. Required TO: A.) Prepare a statement showing the total cost and estimated selling price of Jobs TT5 and KK2. B.) A competitor has quoted a selling price of N$800 for Job TT5. Is THE estimated selling price likely to be successful?

Calculation of Job costing for Jobs TT5 and KK2 with explanation is given below,

Answered: A.) Prepare a statement showing the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 1

You have been asked to calculate a selling price for two jobs: Job TT5 and Job KK2.

The details for Job TT5 are as follows:

Direct materials: 10 units at N$12.40.
Direct labour:
- 20 hours for department A,
- 10 hours for department B
- 12 hours for department C
The labour rates are as follows: N$3.80 (A); N$3.30 (B) and N$3.50 (C).
The overhead rates per labour hour, to be used for each department are: N$1.86 (A), N$2.03 (B) and N$0.40 (C).
The firm expects a profit of 55% on the total cost.

The details for Job KK2 are as follows:

Direct materials: 10 units at N$10.80.
Direct labour:
- 16 hours for department A
- 10 hours for department B
- 14 hours for department C
The labour rates are as follows: N$3.80 (A); N$3.30 (B) and N$3.50 (C).
The overhead rates per labour hour, to be used for each departments are: N$1.86 (A), N$1.03 (B) and N$0.50 (C).
The firm expects a profit of 40% on the total cost.

Required TO:

A.) Prepare a statement showing the total cost and estimated selling price of Jobs TT5 and KK2.

B.) A competitor has quoted a selling price of N$800 for Job TT5. Is THE estimated selling price likely to be successful?

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