Prepare a Job Cost Sheet for the above order showing prime cost production cost, total cost and the profit if the total sales were RM350,000.
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.
![(b) KWK Sdn. Bhd. is involved in the business of manufacturing a special
product in Kuala Lipis. The company received an order from a customer in
the month of May 2021. The following costs were incurred for the order:
| 9,000 units @ RM 12 per units
Direct material
Direct labour:
Department 1
Department 2
Direct expenses
300 hours @ RM10 per hour
750 hours @ RM8 per hour
RM24,000
Machine hours involved in the two departments are as follows:
Department 1
Department 2
800 hours
250 hours](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1fd1f4bb-eb46-4451-bf27-1f6c19a87bd0%2F0a94470e-1251-4eff-8827-29701b1850c7%2F3alavxr_processed.png&w=3840&q=75)
![Overhead absorption is based on machine hour for Department 1 and
direct labour hours for Department 2. Selling and distribution overhead is
20% on production costs while administrative overhead is 10% on prime
costs. Additional information for the cost centers is as follows:
Details
Budgeted overhead (RM)
Budgeted direct labour
hours
Budgeted machine hours
Department 1
40,000
1,500
Department 2
60,000
2,500
2,000
1,000
Required:
Prepare a Job Cost Sheet for the above order showing prime cost,
production cost, total cost and the profit if the total sales were
RM350,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1fd1f4bb-eb46-4451-bf27-1f6c19a87bd0%2F0a94470e-1251-4eff-8827-29701b1850c7%2Ftedmg8_processed.png&w=3840&q=75)
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