Reference no: EM132979267
Neon Limited is a manufacturing/production company. On 1 June 2016, there was one uncompleted job in its factory. The job card for this work is summarized as follows.
Job Card, Job No A10
Costs to date €
Direct materials 650
Direct labour (120 hours) 360
Factory overhead (€2 per direct labour hour) 240
Factory cost to date 1,250
During June 2016, three new jobs were started in the factory, and costs of production were as follows.
Direct materials €
Issued to:
Job A10 2,510
Job A11 1,610
Job A12 4,150
Job A13 4,390
Direct labour hours recorded
Job A10 430 hrs
Job A11 650 hrs
Job A12 280 hrs
Job A13 410 hrs
The cost of labour hours during June 2016 was €3 per hour, and production overhead is absorbed at the rate of €2 per direct labour hour.
Completed jobs were delivered to customers as soon as they were completed, and the invoiced amounts were as follows.
Job A10 €6,000
Job A12 €8,100
Job A13 €7,400
Administration and marketing overheads are added to the cost of sales at the rate of 20% of factory cost.
Required
Problem a) Prepare the job accounts for each individual job during June 2016; (the accounts should only show the cost of production, and not the full cost of sale).
Problem b) Prepare the summarized job cost cards for each job, and calculate the profit on each completed job.
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