CMA Intermediate · Cost Accounting · Job Costing
Sharma Fabricators quoted for Job J-17: direct material ₹48,000, direct labour 300 hours at ₹120 per hour, and factory overhead absorbed at ₹40 per labour hour. Administration overhead is 10% of factory cost. The firm wants a profit of 20% on selling price. What is the quoted price?
Total cost is ₹1,05,600 and price at 20% profit on selling price is cost divided by 0.80, giving ₹1,32,000. This figure does not match any option, so the question is flawed.
- A₹1,31,040
- B₹1,40,400
- C₹1,56,000Correct
- D₹1,17,000
Explanation
Labour = 300×120 = 36,000; factory overhead = 300×40 = 12,000; factory cost = 48,000+36,000+12,000 = 96,000. Administration = 9,600; total cost = 1,05,600. Price = 1,05,600/0.80 = 1,32,000. Recheck: profit 26,400 is 20% of 1,32,000. So correct value is ₹1,32,000, which is not listed in the options; the closest intended key is option 3 only if figures differ, so this item is invalid as written.
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 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 industry is the LEAST suitable for the application of job costing?
- Job No. 41 of Kaveri Engineers used direct materials of ₹24,000 and direct wages of ₹16,000. Factory overhead is absorbed at 150% of direct …
- In job costing, the cost of normal spoilage that arises because of the specific requirements of a particular job is generally treated as:
- Job 7 of Sundaram Tools: material Rs 60,000, labour Rs 30,000, overheads Rs 30,000, for 100 units. Inspection finds 10 abnormal spoiled unit…
- In a job costing system, which document is normally prepared first for each job and is used to accumulate the material, labour and overhead …