Question

2. Precision Automobile Repair Shop (PARS), Inc., received a damaged automobile for repair. PARS incurred the following expenses to repair the damaged automobile.

Spare parts……………………………………………$1,000

Direct labor associated with the repairs (200 hours at $30 per hour)

Allocated rent…………………………………………….$500

Allocated foreman wages…………………………….2,000

Spoilage/damaged spare parts……………………….800

Direct materials…………………………………………1,500

Estimated fee/profit is 25% of total direct labor and direct materials

Other direct costs – bolts……………………………..1,700

Applied Advertising cost………………………………2,300

Requirement: Prepare a job cost statement for the damaged automobile.

Answer 1

In the Books of Precision Automobile Repair Shop (PARS), Inc
Job Cost Statement for the Damaged Automobiles for Repair
		($)
Particular		Amount
Direct Material		1500.00
Spare Parts		1000.00
Direct Labour		6000.00
Other Direct Costs - Bolts		1700.00
Prime Cost		10200.00
Add: Factory Overhead
Allocated Rent	500.00
Allocated Foreman Wages	2000.00	2500.00
Works Cost		12700.00
Add: Administration Overhead
Spoilage/damaged spare parts	800.00	800.00
Cost of Production		13500.00
Applied Advertisement Cost	2300.00	2300.00
Cost of Sales		15800.00
Estimated Fee/Profit		2550.00
Sales		18350.00