Poodle Grooming Parlour has overheads of ​£11,000 per month. Each month 2,000 direct labour hours are worked and charged to specific​ jobs, each of which involves grooming dogs for shows.   The costs and time incurred on job number 66962 ​were:   Direct materials​ (£) 40.00 Direct labour​ (hours) 5 Wage rate​ (£ per​ hour)   16.00   Overheads are charged to jobs on a direct labour hour basis. The cost to the customer is full cost plus 80​%.   ​Required: Calculate the full cost and the amount to be charged to the customer for job number 66962.       Question content area bottom Part 1 ​Firstly, the overhead absorption rate can be found by this​ formula:   ​(Complete the necessary drop​ downs.)       Part 2 The values can now be inserted​ (Calculate the overhead absorption rate to two decimal ​places.)​:   Overhead absorption rate   ​=       ​=   ​£enter your response here   per direct labour hour Part 3 The full cost of job number 66962 can now be calculated ​(Round your answer to 2 decimal ​places.)​:     £   Direct materials     Direct labour     Overheads     Full cost of the job     Part 4 ​Finally, the amount to be charged to the customer for job number 66962 can be​ calculated: ​(Round your answer to 2 decimal​ places.)     £   Profit added     Amount charged to customer

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
 
Poodle Grooming Parlour has overheads of
​£11,000
per month. Each month
2,000
direct labour hours are worked and charged to specific​ jobs, each of which involves grooming dogs for shows.
 
The costs and time incurred on job number
66962
​were:
 
Direct materials​ (£)
40.00
Direct labour​ (hours)
5
Wage rate​ (£ per​ hour)
  16.00
 
Overheads are charged to jobs on a direct labour hour basis. The cost to the customer is full cost plus
80​%.
 
​Required:
Calculate the full cost and the amount to be charged to the customer for job number
66962.
 
 
 

Question content area bottom

Part 1
​Firstly, the overhead absorption rate can be found by this​ formula:
 
​(Complete the necessary drop​ downs.)
 
 
 
Part 2
The values can now be inserted​ (Calculate the overhead absorption rate to two decimal
​places.)​:
 
Overhead absorption rate
 
​=
 
 
 
​=
 
​£enter your response here
 
per direct labour hour
Part 3
The full cost of job number
66962
can now be calculated ​(Round your answer to 2 decimal
​places.)​:
 
 
£
 
Direct materials
 
 
Direct labour
 
 
Overheads
 
 
Full cost of the job
 
 
Part 4
​Finally, the amount to be charged to the customer for job number
66962
can be​ calculated:
​(Round your answer to 2 decimal​ places.)
 
 
£
 
Profit added
 
 
Amount charged to customer
 
 
Expert Solution
steps

Step by step

Solved in 3 steps

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
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