Job Order Costing

Numerical

Question 1: A manufacturing company is planning to sell a batch of 20 Bags (Job 3454) to a

retailer for Rs. 309700. Direct material is Rs. 60,000, Direct manufacturing labor cost is Rs.
18976 & Manufacturing overhead costs are Rs. 67,900.
The cost allocation base is machine-hours. 2090 machine-hours are used by all jobs whereas, Job
3454 used 350 machine-hours.
Question 2: A manufacturing company is planning to sell a batch of 75 Sims (Job I7M584) to a
retailer for Rs. 1345600.
1. Direct materials = Rs. 115,000
2. Direct manufacturing labor = Rs. 76,000
3. Manufacturing overhead costs @ 70% of Labor cost
The cost allocation base is machine-hours. Job I7M584 used 670 machine-hours. 3765 machine-
hours are used by all jobs.
Question 3: Assume that the Paint Shop can purchase paints for Rs. 21 from a local factory;
other variable costs amount to Rs. 4 per unit. The local factory allows the Paints Shop to
return all unsold pants and receive a full Rs. 20 refund per pair of pants within one year. The
average selling price per paint box is Rs.66 and total fixed costs amount to Rs.64,750.

1. How much revenue will the business receive if 2100 units are sold?
2. How much costs will the business incur?
3. What is the contribution margin per unit?
4. What is the total contribution margin when 2,100 pairs of pants are sold?
5. What is the contribution margin percentage?