2b (i) Preparation of the job cost sheet of Akupa Engineering for job Y152:
Under the traditional job costing system Job Y152 total costs equals $382,777.59.
2b (ii) Calculation of quotation price for job Y152:
Akupa Engineering Ltd.’s profit margin is 25% therefore:
Cost price = 75%
Profit Margin = 25%
Selling Price = 100%
The quoted price of Job Y152 will therefore equal $385,777.59/75% x 100% = $514,370.12.
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The amount of units in closing stock is calculated as follows:
Opening units + Actual units produced – Actual units sold.
Therefore closing stock equals = 3,500 + 64,000 + 62,000 = 5,500 units.
Under Marginal costing each unit of orange juice will be valued at the variable cost of production. This is calculated as follows:
Total variable production cost divided by the number of actual units produced.
Variable cost per unit = $3,200,000/64,000 units = $50 per unit.
Therefore the value of the closing stock under marginal costing would be $50 x 5,500 unit = $275,000.
The value of the opening stock under marginal costing would be the total of opening inventory given minus the value of the fixed production overheads included:
Therefore the opening stock = $210,000 - $35,000 = $175,000.
Now that all of the workings have been completed the Marginal Costing Income Statement of Aqualead for the year ended 31st March, 2011 can be prepared.
The author holds a Bsc (Hons) Degree in Applied Accounting from Oxford Brookes University, England and enjoys a successful career as an Accounting Supervisor and a private tutor.