CMA Intermediate · Cost Accounting · Job Costing
Job X at Ganga Printers took 300 labour hours in the press shop. The shop's budgeted overheads are ₹2,40,000 for 4,000 budgeted labour hours. Direct materials for the job are ₹18,000 and direct labour is ₹9,000. What is the prime cost plus the absorbed overhead for the job?
The answer is ₹45,000. The labour hour rate is ₹60, so 300 hours absorb ₹18,000 of overhead. Adding this to prime cost of ₹27,000, made of materials ₹18,000 and labour ₹9,000, gives ₹45,000.
- A₹27,000
- B₹45,000Correct
- C₹36,000
- D₹54,000
Explanation
Overhead rate = 2,40,000 ÷ 4,000 = ₹60 per hour. Overhead absorbed = 300 × 60 = 18,000. Prime cost = 18,000 + 9,000 = 27,000. Total = 27,000 + 18,000 = 45,000. The option ₹27,000 is prime cost alone.
Did you get it right without looking?
One question tells you little. A timed set on Job Costing shows your real accuracy, how long you take and where you lose marks.
More Job Costing questions
- Job 41 of Kaveri Engineering incurred direct material Rs 40,000, direct labour Rs 25,000 and factory overheads absorbed Rs 15,000. During pr…
- Job 9 at Sundaram Works was charged materials of ₹50,000, of which materials worth ₹4,000 were returned to stores, and wages of ₹30,000. Mat…
- In a job costing system, the document on which direct materials, direct labour and overheads for an individual order are accumulated is call…
- Job 17 of Narmada Fabricators has a total cost of ₹90,000. The firm quotes a price that gives a profit of 20% on the selling price. What is …
- Which statement about job costing is correct?
- Which industry is the LEAST suitable for the application of job costing?