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An engineering company which uses job costing to attribute costs to individual products and services provided to its customers has began the preparation of its fixed production overhead cost budget for 2017. Cost has been identified as follows:- Machining Assembly Finishing Stores Maintenance К000 K'000 К000 K'000 KO00 Apportioned cost 6,000 2,500 1,500 1,000 800 The stores and maintenance departments are production department and provide services as- follows: Machining Assembly Finishing Stores Maintenance Stores 40% 30% 20% 10% Maintenance 55% 20% 20% 5% The number of machine and labour hours budgeted for 2018 is: Machining Assembly Finishing Machine hours 50,000 4,000 5,000 Labour hours 10,000 30,000 20,000 Required: A) Calculate appropriate overhead absorption rates for each production department for 2017. B) Prepare a quotation for job K34 to be commenced early in 2017 assuming it has: Direct materials costing К24, 000 Direct labour costing К15, 000 And requires: Machine hours labour hours Machining department 45 10 Assembly 15 Finishing department 4 12 And that profit is 20% of selling price.

An engineering company which uses job costing to attribute costs to individual products and services provided to its customers has began the preparation of its fixed production overhead cost budget for 2017. Cost has been identified as follows:- Machining Assembly Finishing Stores Maintenance К000 K'000 К000 K'000 KO00 Apportioned cost 6,000 2,500 1,500 1,000 800 The stores and maintenance departments are production department and provide services as- follows: Machining Assembly Finishing Stores Maintenance Stores 40% 30% 20% 10% Maintenance 55% 20% 20% 5% The number of machine and labour hours budgeted for 2018 is: Machining Assembly Finishing Machine hours 50,000 4,000 5,000 Labour hours 10,000 30,000 20,000 Required: A) Calculate appropriate overhead absorption rates for each production department for 2017. B) Prepare a quotation for job K34 to be commenced early in 2017 assuming it has: Direct materials costing К24, 000 Direct labour costing К15, 000 And requires: Machine hours labour hours Machining department 45 10 Assembly 15 Finishing department 4 12 And that profit is 20% of selling price.

FINANCIAL ACCOUNTING
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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An engineering company which uses job costing to attribute costs to individual products and services provided to its customers has began the preparation of its fixed production overhead cost budget for 2017. Cost has been identified as follows:- Machining Assembly Finishing Stores Maintenance К000 К000 К000 К000 K000 Apportioned cost 6,000 2,500 1,500 1,000 800 The stores and maintenance departments are production department and provide services as follows: Machining Assembly Finishing Stores Maintenance Stores 40% 30% 20% 10% Maintenance 55% 20% 20% 5% The number of machine and labour hours budgeted for 2018 is: Machining Assembly Finishing Machine hours 50,000 4,000 5,000 Labour hours 10,000 30,000 20,000 Required: A) Calculate appropriate overhead absorption rates for each production department for 2017. B) Prepare a quotation for job K34 to be commenced early in 2017 assuming it has: Direct materials costing К24, 000 Direct labour costing К15, 000 And requires: Machine hours labour hours Machining department 45 10 Assembly 15 Finishing department 4 12 And that profit is 20% of selling price.
Transcribed Image Text:An engineering company which uses job costing to attribute costs to individual products and services provided to its customers has began the preparation of its fixed production overhead cost budget for 2017. Cost has been identified as follows:- Machining Assembly Finishing Stores Maintenance К000 К000 К000 К000 K000 Apportioned cost 6,000 2,500 1,500 1,000 800 The stores and maintenance departments are production department and provide services as follows: Machining Assembly Finishing Stores Maintenance Stores 40% 30% 20% 10% Maintenance 55% 20% 20% 5% The number of machine and labour hours budgeted for 2018 is: Machining Assembly Finishing Machine hours 50,000 4,000 5,000 Labour hours 10,000 30,000 20,000 Required: A) Calculate appropriate overhead absorption rates for each production department for 2017. B) Prepare a quotation for job K34 to be commenced early in 2017 assuming it has: Direct materials costing К24, 000 Direct labour costing К15, 000 And requires: Machine hours labour hours Machining department 45 10 Assembly 15 Finishing department 4 12 And that profit is 20% of selling price.
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