Product Cost And Job Costing

Question 1

Materials handling and control documents needed

Answer 1

Materials handling and control documents

Question 2

Material handling and control documentation

Answer 2

Production manager decides on minimum level of stock to be held.
•Storekeeper makes regular checks of physical stock levels against minimum requirements. When stock has fallen to a minimum level, storekeeper sends a request to the buying department for replacement items.
•Buying department sends an order to supplier.
•Goods arrive and are received by storekeeper.
•Supplier’s invoice received by accounts department.
•Storekeeper issues goods to production department on the basis of a requisition note

Question 3

Waste and scrap definition

Answer 3

Waste: Materials that have no value.
•Scrap: Waste material that can be sold for disposal, usually at a low price.

Question 4

Labour costs: Types of pay scheme

Answer 4

Monthly salary
•Basic salary plus extra payments depending on output levels or targets achieved
•Hourly rate based on actual hours worked
•Piecework based on number of items of output or units of service
•Benefits in kind
•Employer’s labour costs, such as employer’s contributions to national insurance.
•Performance related pay (‘PRP’): based on measurable output
•Merit pay: based on quality of achievement

Question 5

Prime Cost (what is it a total of!)

Answer 5

Total :
•Direct materials
•Direct Labour
•Other direct cost of production

Question 6

Production (what it is a total of)

Answer 6

Total:
•indirect materials
•Indirect labour
•Other indirect costs of production

Question 7

All the production overhead costs MUST be allocated to the…

Answer 7

products