a.)The classification of the various costs of a firm depends on the base used. Using specific examples, classify the costs of a manufacturing firm on the basis of:

Function

Behavior

Controllability [6 Marks)

b)Job K52 is made in two cost centres, Assembly and Finishing, whose overhead absorption rates are Sh.6.25 and Sh.11 per hour respectively. The job details are:

ASSEMBLY FINISHING

Direct materials Sh.120 Sh.25

Direct Labour Sh.32 Sh.70

The job takes 4 hours in the Assembly centre and 14 hours in the Finishing section. You are required to determine the production cost of job K52. [2 Marks]

c) Briefly illustrate your understanding of step costs. [2 Marks]

Answer rating: 100% (QA)

a Classification of Costs for a Manufacturing Firm 1 Function Direct Materials These costs are directly associated with the production of goods and can be easily traced to specific products or project... View the full answer