(b) The following information is provided for FairDeal furniture Įtd.The information will be used to determine the total cost incurred for Job-FD800 which entailed production of sofa sets The company has one production department where all the furniture is produced. 1. The following budget figures are provided for the production department for the year 2021. Budget Production overhead cost Shs 40,000,000 Budgeted Direct labour hours 2,500 hours Note: The company allocated Factory overheads to customer jobs using the Budgeted Direct labour hours as the absorption base. 2. The cost details for Job-FD800 are as given below; 1.Cost of Materials used in the Job 250,000 2.Direct labour hours used to complete the job (400 Hrs). 400 Direct Labour hours The company pays Shs 1,200 For every direct labour hour used in the job 3.The company hired a special machine for stitching the material used in the sofa at a cost of: 35,000 4.The Direct Labour hours used to complete the job 400 Direct Labour hours Profit Margin (10%) 5.The company adds a profit margin of 25% to the total cost of the job to determine the Selling price of the job.

(b) The following information is provided for FairDeal furniture Įtd.The information will be used to determine the total cost incurred for Job-FD800 which entailed production of sofa sets The company has one production department where all the furniture is produced. 1. The following budget figures are provided for the production department for the year 2021. Budget Production overhead cost Shs 40,000,000 Budgeted Direct labour hours 2,500 hours Note: The company allocated Factory overheads to customer jobs using the Budgeted Direct labour hours as the absorption base. 2. The cost details for Job-FD800 are as given below; 1.Cost of Materials used in the Job 250,000 2.Direct labour hours used to complete the job (400 Hrs). 400 Direct Labour hours The company pays Shs 1,200 For every direct labour hour used in the job 3.The company hired a special machine for stitching the material used in the sofa at a cost of: 35,000 4.The Direct Labour hours used to complete the job 400 Direct Labour hours Profit Margin (10%) 5.The company adds a profit margin of 25% to the total cost of the job to determine the Selling price of the job.

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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