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Heet Shah (Tax Consultant)     19 June 2021

How to compute stock in case of goods sent tojob worker in case of jewels

How to compute valuation of stock in case of goods sent to job worker in case of jewels? 


 2 Replies

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     19 June 2021

Many people follow job costing

Predetermined overhead rate = Estimated Overhead / Estimated Activity

this needs estimated overheads and I don’t understand why many make err like this. They can do computations one day trial cost basis to get accurate measure of oneday estimated overheads. 

Next, try Relevant cost pricing strategy because this will help you accurately cost of gold sold as it includes the price fluctuations of gold in stack and any new gold you will purchase. This can also be used to calculate revised gold cost as gold rates change everyday.

Note that this is similar to marginal costing which ignores fixed over heads. So, once you finish the above add fixed overheads plus a markup to derive your profit.


1 Like
yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     19 June 2021

I have attached a sample problem. The costs when you compute them on a cost plus pricing basis does not cover the whole opportunity costs lost. 


Attached File : 2750458 20210619201051 example.xlsx downloaded: 3 times
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