Costing Assignment 2019

Costing
Assignment
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By student name
Professor
Date: 28th May, 2018.
Executive Summary
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The purpose of this assignment is to demonstrate the ability to analyze the given financial
information in relation management Accounting problem through the help of the given case
study, based on which the finding of the study is to be presented. Our case study broadly covers
the scenario of the Voltas communication which is applying the Job costing method for
allocation of its indirect manufacturing overhead. It further discusses about the over and under
recovery of overheads along with the treatment of such under or over recovery of overheads. It
also throws light on the mostly used method for allocation of indirect overheads known as
activity-based costing and the suitability of its application in the given case of Voltas
Communication.
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Contents
Question 1.................................................................................................................. 3
Question 2.................................................................................................................. 9
Conclusion................................................................................................................ 11
References............................................................................................................... 12
Question 1
Job costing method
As per job costing method the major motive of the manufacturer is to determine the cost of a
specific job rather than the cost of a process. In this way the revenue and expenses associated
with the job is matched to determine the profitability of a specific job.
As per the Job costing there are basically three major components of a specific job and they are
Material, labor and overheads. In case multiple jobs are being carried out by an entity it becomes
quite difficult to trac the costs associated with the job for which this method may be applied. It is
also a source of financial information to the cost accountant who can compare the actual costs
incurred for a job with the budgeted cost of the job to provide warning to the management in
case it exceeds the budgeted cost of the job (Abdullah & Said, 2017).
1. Calculation of the manufacturing overhead Voltas would have applied to jobs for the 1st
July,2018 to 31st May,2019
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