Exercise 2: Job Costing for Pricing Stellar Engineering Ltd makes one-off production equipment for the food processing industry. The following information relates to job AS3005: Department A £6,000 300 hours Department B £3,500 250 hours Direct materials Direct labour Direct labour rate per hour Production overhead per direct labour hour £4 £12 £9 £6 Administration and other overheads 20% of full production cost 25% of sales price Profit Margin Required: Prepare a costing statement for job AS3005 and calculate the selling price.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
Exercise 2: Job Costing for Pricing
Stellar Engineering Ltd makes one-off production equipment for the food processing
industry. The following information relates to job AS3005:
Department A
£6,000
Department B
£3,500
250 hours
Direct materials
Direct labour
300 hours
Direct labour rate per hour
Production overhead per direct labour hour £4
£12
£9
£6
20% of full production cost
25% of sales price
Administration and other overheads
Profit Margin
Required:
Prepare a costing statement for job AS3005 and calculate the selling price.
Transcribed Image Text:Exercise 2: Job Costing for Pricing Stellar Engineering Ltd makes one-off production equipment for the food processing industry. The following information relates to job AS3005: Department A £6,000 Department B £3,500 250 hours Direct materials Direct labour 300 hours Direct labour rate per hour Production overhead per direct labour hour £4 £12 £9 £6 20% of full production cost 25% of sales price Administration and other overheads Profit Margin Required: Prepare a costing statement for job AS3005 and calculate the selling price.
Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education