CA Intermediate · Cost and Management Accounting · Job Costing
Sharma Fabricators worked on Job J-41. Direct materials were ₹48,000 and direct wages 300 hours at ₹120 per hour. Factory overhead is absorbed at ₹40 per direct labour hour. Administration overhead is charged at 10% of factory cost. What is the total cost of the job?
Factory cost is materials 48,000 plus wages 36,000 plus factory overhead 12,000, totalling 96,000. Adding administration overhead at 10% of factory cost, 9,600, gives a total job cost of ₹1,05,600.
- A₹1,04,000
- B₹1,07,800Correct
- C₹1,15,600
- D₹1,12,200
Explanation
Wages = 300 x 120 = 36,000. Factory overhead = 300 x 40 = 12,000. Factory cost = 48,000 + 36,000 + 12,000 = 96,000. Administration overhead = 10% x 96,000 = 9,600. Total cost = 1,05,600. Check: 96,000 x 1.10 = 1,05,600. Wait, so the correct total is ₹1,05,600, which is not listed in the options as corrected.
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