Max Madina limited Workshop is a factory dealing solely in repairs caused by accident within the Madina –Legon road. It has three departments through which all the vehicles pass: Mechanical workshop, Electrical shop and spraying shop. Information obtains from their cost records shows the following for the last quarter ending 31st December 2016. Wage rate Variable Overheads Direct Labour GH¢ GH¢ HRS MECHAINCAL SHOP 0.66 10,000 10,000 ELECTRICAL SHOP 0.50 9,000 12,000 SPRAYING SHOP 0.50 2,000 5,000 You are to repair and maintain the vehicles for a profit 20% of the price quoted. Fixed factory overheads are estimated at Ghc 5,400.Information relating to the repairs and maintenance of vehicles No AZ 2020 -16 Direct labour hours Cost GHC Material from store 500 Components to be bought 120 Mechanical shop 50 Electrical shop 60 Spraying shop 40 Washing for a road test 20 Administration cost will be absorbed by adding 10% to the cost already given above You are required to prepare a detailed estimate for the cost of repairs of the vehicle no. AZ 2020 16
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Max Madina limited Workshop is a factory dealing solely in repairs caused by accident within the Madina –Legon road. It has three departments through which all the vehicles pass: Mechanical workshop, Electrical shop and spraying shop.
Information obtains from their cost records shows the following for the last quarter ending 31st December 2016.
|
|
Wage rate |
Variable |
Direct Labour |
|
|
GH¢ |
GH¢ |
HRS |
|
MECHAINCAL SHOP |
0.66 |
10,000 |
10,000 |
|
ELECTRICAL SHOP |
0.50 |
9,000 |
12,000 |
|
SPRAYING SHOP |
0.50 |
2,000 |
5,000 |
|
|
|
|
|
You are to repair and maintain the vehicles for a profit 20% of the price quoted.
Fixed factory overheads are estimated at Ghc 5,400.Information relating to the repairs and maintenance of vehicles No AZ 2020 -16
|
|
Direct labour hours |
Cost GHC |
|
Material from store |
|
500 |
|
Components to be bought |
|
120 |
|
Mechanical shop |
50 |
|
|
Electrical shop |
60 |
|
|
Spraying shop |
40 |
|
|
Washing for a road test |
|
20
|
Administration cost will be absorbed by adding 10% to the cost already given above
You are required to prepare a detailed estimate for the cost of repairs of the vehicle no. AZ 2020 16
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