Page 209 - DCOM202_COST_ACCOUNTING_I

Unit 10: Job and Batch Costing

Notes
Example: From the data given below, obtained from the books of a factory, for the year
ended 30th September, 2008
Particulars Completed Jobs (`) Work-in-Progress (`)
Materials from stores 4,70,000 1,50,000
Chargeable expenses 80,000 20,000
Wages 4,50,000 2,00,000
Materials transferred to work-in-progress 8,000
Materials returned to stores 6,000

Factory overhead is 80% of wages and office overhead 25% of factory cost. The value of executed
jobs during the year was ` 2,000,000.
Prepare (a) Consolidated completed jobs account showing profit or loss; and (b) Consolidated
work-in-progress account.
Solution:

Consolidated Completed Jobs Account for the Year Ending 30th September, 2008
Particulars Amount (`) Particulars Amount (`)
To Materials 4,70,000 By Contractee’s 20,00,000
(proceeds of job
Less: Returned to stores 6,000 finished)

Transferred to work- 8,000 14,000 4,56,000
in-progress
To Wages 4,50,000
To Chargeable expenses 80,000
To Factory overhead (80% wages) 3,60,000
To Office overhead (25% of works cost i.e. 3,36,500
` 13,46,000)
To Net profit (Transferred to Profit and Loss 3,17,500
Account)
20,00,000 20,00,000

Consolidated Work-in-progress
Particulars Amount (`) Particulars Amount (`)
To Material 1,50,000 By Balance c/d 6,72,500
Add: Transferred from comp. 8,000 1,58,000
job
To Wages 2,00,000
To Chargeable expenses 20,000
To Factory overhead (80% 1,60,000
of wages)
To Office overheads (25% 1,34,500
of works cost)
6,72,500 6,72,500

10.4 Batch Costing

This is a variation of job costing. Under this method, the cost of a batch or group of products
is ascertained. The unit of cost is a batch or group of identical products, instead of a single job,

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