Reference no: EM132611134

XYZ Engineering Services Ltd is asked to provide a quotation to replace the cylinder head for the engine of a machine in a local factory. The items will need to be cast in a foundry and then passed to the finishing shop for machining to specification.

• Materials required will be 200kg ingot of high strength steel, which cost $10 per kg.
• Direct labour will be 15 hours in the foundry, and 20 hours in the finishing shop, of which 12 hours will be machine hours. Foundry workers are paid $10 per hour while the machine operators in the finishing shop are paid $12 per hour.
• Overheads are charged on the basis of 80% of direct labour cost in the foundry, and on the basis of $20 per machine hour in the finishing shop.
• Profit is to be 25% of cost price.

REQUIRED:

Question A. Prepare a job cost sheet showing the estimated cost of the job.

Question B. Describe two (2) other documents that are used with a job costing system. 

Question C. Cite two (2) examples of work that may be done using specific order costing and two (2) examples of work that may be done using costing for continuous work.

Question D. For the services listed below, select an appropriate cost unit:

i. programming

ii. electricity generation

iii. function facilities

iv. passenger transport

Question E. Distinguish between job costing and batch costing, citing TWO (2) examples of industries that would employ each.