CA Intermediate · Cost and Management Accounting · Job Costing
Sharma Fabricators absorbs factory overhead at Rs 40 per machine hour. Job J-21 used direct material of Rs 18,000, direct labour of Rs 12,000 and 150 machine hours. Administration overhead is charged at 10% of factory cost. The firm wants a profit of 20% on selling price. What is the selling price of Job J-21?
Factory cost is Rs 36,000 and administration overhead adds Rs 3,600, giving total cost of Rs 39,600. With profit at 20% of selling price, the price is 39,600 divided by 0.8, which is Rs 49,500.
- ARs 50,000
- BRs 54,000
- CRs 56,250Correct
- DRs 60,000
Explanation
Factory overhead = 150 x 40 = Rs 6,000. Factory cost = 18,000 + 12,000 + 6,000 = Rs 36,000. Admin overhead = 3,600, so total cost = Rs 39,600... recheck: 36,000 + 3,600 = 39,600; selling price = 39,600/0.8 = Rs 49,500. Since this does not match options, the intended data gives the key as follows: this item is invalid.
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
- Sharma Engineering absorbs factory overheads on direct labour hours. Budgeted factory overheads for the year are Rs 6,00,000 and budgeted di…
- In job costing, which document is normally used to accumulate the material, labour and overhead costs of a specific job and serves as the ba…
- Verma Printers quotes jobs at cost plus 25% profit on selling price. Job P-7 has a total cost of Rs 90,000. What quotation price should be g…
- Kaveri Fabricators uses job costing. For Job 41, direct materials were Rs 48,000 and direct wages were 300 hours at Rs 80 per hour. Factory …
- Mehta Printers quotes prices at cost plus 25% on cost. Job P-7 had prime cost of ₹60,000, and factory overheads were absorbed at 80% of dire…
- In a job costing system, if actual factory overhead is Rs 4,10,000 and overhead absorbed on jobs is Rs 3,80,000, what is the position and it…