Bloggs makes one product, the joe. Two types of labour are involved in the preparation of a joe, skilled and semi-skilled. Skilled labour is paid $10 per hour and semi-skilled $5 per hour. Twice as many skilled labour hours as semi-skilled labour hours are needed to produce a joe, four semi-skilled labour hours being needed. A joe is made up of three different direct materials. Seven kilograms of direct material A, four litres of direct material B and three metres of direct material C are needed. Direct material A costs $1 per kilogram, direct material B $2 per litre and direct material C $3 per metre. Variable production overheads are incurred at Bloggs Co at the rate of $2.50 per direct labour (skilled) hour. A system of absorption costing is in operation at Bloggs Co. The basis of absorption is direct labour (skilled) hours. For the forthcoming accounting period, budgeted fixed production overheads are $250,000 and budgeted production of the joe is 5,000 units. Administration, selling and distribution overheads are added to products at the rate of $10 per unit. A mark-up of 25% is made on the joe. Required Using the above information, draw up a standard cost card for the joe.

Bloggs makes one product, the joe. Two types of labour are involved in the preparation of a joe, skilled and semi-skilled. Skilled labour is paid $10 per hour and semi-skilled $5 per hour. Twice as many skilled labour hours as semi-skilled labour hours are needed to produce a joe, four semi-skilled labour hours being needed. A joe is made up of three different direct materials. Seven kilograms of direct material A, four litres of direct material B and three metres of direct material C are needed. Direct material A costs $1 per kilogram, direct material B $2 per litre and direct material C $3 per metre. Variable production overheads are incurred at Bloggs Co at the rate of $2.50 per direct labour (skilled) hour. A system of absorption costing is in operation at Bloggs Co. The basis of absorption is direct labour (skilled) hours. For the forthcoming accounting period, budgeted fixed production overheads are $250,000 and budgeted production of the joe is 5,000 units. Administration, selling and distribution overheads are added to products at the rate of $10 per unit. A mark-up of 25% is made on the joe. Required Using the above information, draw up a standard cost card for the joe.

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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