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7 marksJob and Batch Costing

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

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.

Prepare a job cost sheet for the Eldon Company job completed in March, showing clearly the traceable and non-traceable costs for the job.

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Other parts of this question

  1. 2(a)(i)Calculate the firm's pre-determined overhead application rate.[4 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