Question 3 (Approximate completion time: 30 mins) [CLO 5] (Total 25 marks)

ABC Limited is a jobbing company. On 1 June 2020, there was one uncompleted job in the factory. The job card for this work is summarized as follows:

Job Card, Job No. 1002
Cost to date:	$
Direct materials	700
Direct labour (100 hours)	400
Factory overhead ($5 per direct labour hour)	600
Factory Cost to date	1,700

During June, three new jobs were started in the factory, and costs of production were as follows:

Direct Materials	$
Issued to:
Job 1002	6,000
Job 1003	9,000
Job 1004	8,000

Material transfers	$
Job 1004 to job 1003	900
Job 1002 to Job 1004	1,500

Materials returned to store	$
From Job 1002	1,200

Direct labour hours recorded
Job 1002	250 hrs
Job 1003	300 hrs
Job 1004	480 hrs

The cost of labour hours during June 2020 was $4 per hour, and production overhead is absorbed at the rate of $5 per direct labour hour. Completed jobs were delivered to customers as soon as they were completed, and the invoiced amounts were as follows:

Job 1002	$10,000
Job 1004	$24,000

Administration and marketing overheads are added to the cost of sales at the rate of 20% of factory cost.

Required:

1. Prepare the summarized job costs cards for each job, and calculate the profit on each completed job. (22 marks)

2. Differentiate between job and contract costing. (3 marks)