Rock Solid concrete manufacturers supply cement mixture directly to both the construction industryand building supply retailers located throughout the country. The company has three machines eachwith a 100% capacity (60 hours) of 40 tons per week. Due to electricity supply concerns, the machineshave only been able to operate at 75% capacity. One ton of cement mixture requires 400 kg of ProductM and 600 kg of Product N. Ignore any wastage. Product M is purchased at R 80/kg and Product N atR25/kg. Each machine requires five operators. Assume four (4) weeks per month. All materialspurchased are used in the mix of cement and all cement is sold in the month it is manufactured. Thecement plant takes up 90% of the total floor space.Q.2.2Complete the above table by using monthly cost figures. Redraw the table. You donot need to copy the transaction detail. Only use the question number to indicate thequestion answered. 66.7%▾The following is an extract of some of the transactions for the monthPRODUCT COSTNOTRANSACTIONDirect Direct Manufacturing AdminMaterial Labour OverheadsCost1Purchase the requiredquantitythe month2Purchase the requiredquantity of Product N forthe monthThe machine operators earnR2 000 each per weekThe factory supervisorearns R35 000 per monthDepreciation per machineper annum amounts toR156 000Rates and taxes amount toR18 000 per month.Apportion the costaccording to floor spaceEach machine requires 15litres of oil per 20-houroperation. Oil costs R275per litreThe general manager earnsR50 000 per monthCarriage on sales amountsto R3 500 per 5 tonsdeliveredSalesmen commissionamounts to R15 per bagsold, the cement ispackaged in bags of 20kgeachThe independent Institute of Education (Pty) Ltd 2022345678910of Product M forOII42 tPERIOD COSTMarketing/Distribution/Selling costPage 3 ofan3

Product cost and period cost: Product costs are directly related to the production, it involves…

Answered: 66.7% ▾ The following is an extract of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Rock Solid concrete manufacturers supply cement mixture directly to both the construction industry
and building supply retailers located throughout the country. The company has three machines each
with a 100% capacity (60 hours) of 40 tons per week. Due to electricity supply concerns, the machines
have only been able to operate at 75% capacity. One ton of cement mixture requires 400 kg of Product
M and 600 kg of Product N. Ignore any wastage. Product M is purchased at R 80/kg and Product N at
R25/kg. Each machine requires five operators. Assume four (4) weeks per month. All materials
purchased are used in the mix of cement and all cement is sold in the month it is manufactured. The
cement plant takes up 90% of the total floor space.

Q.2.2Complete the above table by using monthly cost figures. Redraw the table. You do
not need to copy the transaction detail. Only use the question number to indicate the
question answered.

66.7%
▾
The following is an extract of some of the transactions for the month
PRODUCT COST
NO
TRANSACTION
Direct Direct Manufacturing Admin
Material Labour Overheads
Cost
1
Purchase the required
quantity
the month
2
Purchase the required
quantity of Product N for
the month
The machine operators earn
R2 000 each per week
The factory supervisor
earns R35 000 per month
Depreciation per machine
per annum amounts to
R156 000
Rates and taxes amount to
R18 000 per month.
Apportion the cost
according to floor space
Each machine requires 15
litres of oil per 20-hour
operation. Oil costs R275
per litre
The general manager earns
R50 000 per month
Carriage on sales amounts
to R3 500 per 5 tons
delivered
Salesmen commission
amounts to R15 per bag
sold, the cement is
packaged in bags of 20kg
each
The independent Institute of Education (Pty) Ltd 2022
3
4
5
6
7
8
9
10
of Product M for
O
II
42 t
PERIOD COST
Marketing/
Distribution/
Selling cost
Page 3 of
an
3

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