Question

The regular working days in a factory are Monday to Friday. Pete and Bec who are being paid 25 and 27 per hour, respectively, worked on Jobs 31 and 32 for the period August 4 to 10. The weekly time records and summary of the job tickets show the following: Total number of hours time in: Pete = 45, Bec = 43; Overtime: Pete = 6, Bec = 5; Expended on the jobs: No 31: Pete = 26, Bec = 17; No. 32: Pete = 20, Bec = 21. Pete was authorized to work on overtime on job no. 31 because of its rush nature; Bec had to work on overtime on job no. 32 to make up for a machine breakdown during the week. Overtime premium is 25%. Factory overhead is 60% of direct labor cost and materials cost comprises 80% of total production cost. What should be the respective production costs of job nos. 31 and 32?

Answer 1

JOB 31:

Labour cost (a) pete = 26*25 + 6* (25 + 25% of25) = 837.5
Labour cost(b) Bec = 27*17 = 459

Tota Labour cost = 837.5 + 459 = 1296.5

Factory overhead = 60% of 1296.5 = 777.9

Material cost = 80% of X = 0.8X

Let production cost = X

production cost = Labour cost + Material cost + Factory overhead

Therefore 1296.5 + 777.9 + 0.8X =X

X( production cost) = 10372

JOB 32

Let production cost = X

production cost = Labour cost + Material cost + Factory overhead

Labour cost (a) pete = 25*20 = 500
Labour cost(b) Bec = 27*21 + 5 * (27+ 25% of 27) = 735.75

Tota Labour cost = 500 + 735.75 = 1235.75

Factory overhead = 60% of 1235.75 = 741.45

Material cost = 80% of X = 0.8X

X= 1235.75 + 741.45 + 0.8X

X( production cost) = 9886