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A company operates a job costing system. The company’s standard net profit margin is 20% of sales.
The estimated value of job 173 are as follow.
DM? 5 meters @ $20 per metre
DL ?14 hrs @ $ 08 per hourVariable production overheads are recovered at the rate of $3 per direct labour hour.
Fixed production overheads for the year are budgeted to be $ 200000 and are to be recorded on the basis of the total of 40000 direct labour hours for the year.
Other overheads in relation to selling, distribution and administration are recorded at the rate of $80 per job.I assume (although you haven’t said) that you are expecting me to give you the answer!
We don’t provide answers to test questions – unless you were set this as a test then you must have an answer in the same book in which you found the question. (If not, then you are using the wrong book – you should be using a Revision Kit from one of the ACCA approved publishers).
Ask about whatever it is in the answer that you are not clear about, and then I will explain.However, this question could not possibly be asked in Paper FM – it is not in the syllabus for Paper FM.
It is a very basic Paper MA (Paper F2) question, and how to do it is explained in detail in my free lectures for Paper F2.
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