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4 marksJob and Batch Costing

CAPE Accounting Unit 2 · 2008 · Paper 2 · Question 2(a)(i)

Williams and Associates is a law firm using a job order costing system. Budgeted client billings and costs for 2007 are provided, with percentages indicating directly traceable costs. The predetermined overhead application base is total direct costs.

Calculate the firm's pre-determined overhead application rate.

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Other parts of this question

  1. 2(a)(ii)Prepare a job cost sheet for the Eldon Company job completed in March, showing clearly the traceable and non-traceable costs for the job.[7 marks]
  2. 2(a)(iii)Calculate the amount of over- or under-applied overhead (non-traceable) costs for Williams and Associates for 2007.[5 marks]
  3. 2(b)(i)a)Compute the unit product cost assuming that Eldon Company uses absorption costing.[3 marks]
  4. 2(b)(i)b)Compute the unit product cost assuming that Eldon Company uses variable costing.[2 marks]
  5. 2(b)(ii)Prepare a variable costing income statement for the company.[5 marks]
  6. 2(b)(iii)Prepare an absorption costing income statement for the company.[5 marks]
  7. 2(b)(iv)Reconcile the difference between the net operating income computed under variable costing and that computed under absorption costing.[2 marks]
  8. 2(c)Outline ONE way in which activity-based costing differs from traditional costing methods.[2 marks]

More practice: the rest of this paper · more Job and Batch Costing questions · all CAPE Accounting Unit 2 past papers