Shilongo Ltd uses costing to attribute costs to individual products and services provided to its customers. It has begun the preparation of its fixed production cost budget for the forthcoming period. The company three production departments Machining, Assembly and Finishing; and two service departments Stores and Maintenance. The following costs have been produced: Machining Assembly Finishing Stores Maintenance 2,500 1,500 1,000 Overhead cost $ 6,000 800 The number of machine and labor hours budgeted for the forthcoming period is budgeted as follows:- Machining Assembly Finishing Machine hours 500 40 50 Labor hours 100 300 200 Overheads are absorbed in Assembly and Finishing departments on a Labor hour basis; and in Machining departments they are absorbed on a machine hour basis. It has been estimated that service departments usage is as follows: Machining Assembly Finishing Stores Maintenance Maintenance 55% 20% 20% 5% - Stores 40% 30% 20% 10% Required: c) Prepare a quotation for job K64 to be commenced next period, assuming it has: Direct material Costing $240 Direct labor Costing $150 And requires: Machine Labor hours hours Machining department 45 10 Assembly department 5 15 Finishing department 4 12 And that profit is 20% of selling price.
Shilongo Ltd uses costing to attribute costs to individual products and services provided to its customers. It has begun the preparation of its fixed production cost budget for the forthcoming period. The company three production departments Machining, Assembly and Finishing; and two service departments Stores and Maintenance. The following costs have been produced: Machining Assembly Finishing Stores Maintenance 2,500 1,500 1,000 Overhead cost $ 6,000 800 The number of machine and labor hours budgeted for the forthcoming period is budgeted as follows:- Machining Assembly Finishing Machine hours 500 40 50 Labor hours 100 300 200 Overheads are absorbed in Assembly and Finishing departments on a Labor hour basis; and in Machining departments they are absorbed on a machine hour basis. It has been estimated that service departments usage is as follows: Machining Assembly Finishing Stores Maintenance Maintenance 55% 20% 20% 5% - Stores 40% 30% 20% 10% Required: c) Prepare a quotation for job K64 to be commenced next period, assuming it has: Direct material Costing $240 Direct labor Costing $150 And requires: Machine Labor hours hours Machining department 45 10 Assembly department 5 15 Finishing department 4 12 And that profit is 20% of selling price.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Shilongo Ltd uses costing to attribute costs to individual products and services provided
to its customers. It has begun the preparation of its fixed production cost budget for the
forthcoming period. The company three production departments Machining, Assembly
and Finishing; and two service departments Stores and Maintenance.
The following costs have been produced:
Machining Assembly Finishing Stores Maintenance
2,500 1,500 1,000
Overhead cost $
6,000
800
The number of machine and labor hours budgeted for the forthcoming period is
budgeted as follows:-
Machining Assembly Finishing
Machine hours
500
40
50
Labor hours
100
300
200
Overheads are absorbed in Assembly and Finishing departments on a Labor hour
basis; and in Machining departments they are absorbed on a machine hour basis.
It has been estimated that service departments usage is as follows:
Machining Assembly Finishing Stores Maintenance
Maintenance
55%
20%
20%
5%
- Stores
40%
30%
20%
10%
Required:
c) Prepare a quotation for job K64 to be commenced next period, assuming it
has:
Direct material Costing $240
Direct labor
Costing $150 And
requires:
Machine
Labor
hours
hours
Machining department
45
10
Assembly department
5
15
Finishing department
4
12 And
that profit is 20% of selling price.
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