Question:
In an engineering company the factory overheads are recovered on a fixed percentage basis on direct wages and administrative overheads are absorbed on a fixed percentage basis on factory cost.
The company has furnished the following data relating to two jobs undertaken by it in a period:
|
Job 101 Rs.
|
Job 102 Rs.
|
|
Direct material
|
54,000
|
37,500
|
|
Direct labour
|
42,000
|
30,000
|
|
Selling price
|
1,66,650
|
1,28,250
|
|
Percentage profit on total cost
|
10%
|
20%
|
Required:
1. Compute the percentage recovery rates of factory overheads and administrative overheads.
2. Calculate the amount of factory overheads, administration overhead and profit for each of the two jobs.
3. Using the above recovery rates, fix the selling price of Job 103, the additional data being:
Direct materials Rs. 24,000
Direct wages Rs. 20,000