Sun company makes special components for solar panel manufacturers. The cost details of job No: A007 is given below,

1. The details material needed for job No: A007 is as follow,

Type of Material	Quantity needed	Cost per unit
X	750 cm	$20 per meter
Y	5 kg	$5 per kg

2. Royalty payment of $100 has to be paid to the designer of this solar panel for each unit they produce.

3. The job needs a special machine which needs to be purchased for $500 and it has no residual value.

4. This job needs to be completed in two departments and the details of those departments are given below,

Departments	Total Overhead	Machine Hours	Labour Hours
Department A	$5000	500	1000
Department B	$8000	160	320

5. Department A and Department B are labor-intensive and machine intensive respectively. Labors are paid a flat rate of $8 per hour regardless of the department they work.

6. The job needs following labor and machine hours from each department.

Department	Labor hours	Machine hours
Department A	10	05
Department B	05	10

7. The company’s policy is to add 10% on prime cost for distribution cost and 10% of the total cost for administration expenses.

8. The expected profit mark-up is 20% on the total cost.

You are required to:

Prepare an Operating Statement for the job, using the above information, showing clearly the Total Cost, Profit, and Selling Price.

Answer rating: 100% (QA)

Particulars Quantity Per unit Amount A Direct Material Material X 750cm 75 m 20 ... View the full answer