INFORMATION RAW MATERIAL STOCK Meters Cost per metre Total amount Opening Balance (1 Jan 2023) Purchases 25 Feb 2023 600 m R39 500 4 215 m R316 710 2 220 m R72.00 R159 840 25 May 2023 1 680 m R78.00 R131 040 25 August 2023 R82.00 R25 830 Returns: (damaged stock) 25 May 2023 195 m R78,00 Closing balance (31 Dec 2023) 495 m ? ? Stock sent to the factory 4 125 m The previous bookkeeper prepared a factory overhead cost note but did not take into account the items listed below. Their total was R44 188. Note that the other cost accounts were adjusted accordingly. Rent Expense Water & Electricity Insurance Office sundry expenses 72 252 51 840 22 050 9 570 Rent must be allocated according to floor space occupied. The factory occupies 500 m², the sales department occupies 300 m² and the office occupies 100 m². 75% of the water and electricity relates to the factory. • Insurance on equipment is allocate in the ratio 3:2: 1 between the factory, sales and office departments. Note that insurance is a fixed monthly instalment and is paid for three months in advance. • 2/3 of the sundry expenses relates to the factory and the rest is office sundry expenses. EXTRACT FROM PRODUCTION COST STATEMENT Direct Material Cost Direct Labour Cost Factory Overhead Costs Total Fixed Cost Variable cost per unit 2023 2022 TOTAL (R) ? UNIT COST (R) UNIT COST (R) ? 42.00 171 675 32.70 26.50 ? ? 32.40 229 150 47.40 87.45 81.70 5 080 units 3 387 units ? 3 195 Number of units produced and sold Breakeven point EXTRACT FROM INCOME STATEMENT 2023 2022 TOTAL (R) | UNIT COST (R) | UNIT COST (R) Sales Cost of sales 751 840 ? 132,00 529 985 101,00 96,15 Gross Profit 221 855 41,55 35,85 Selling and distribution costs 86 625 16,50 13,50 Administration costs 71 662 13,70 15,00 Net Profit 63 568 12,51 7,35 ⚫ The selling price of a similar canvas bag from competitors is R149.00 per bag.
INFORMATION RAW MATERIAL STOCK Meters Cost per metre Total amount Opening Balance (1 Jan 2023) Purchases 25 Feb 2023 600 m R39 500 4 215 m R316 710 2 220 m R72.00 R159 840 25 May 2023 1 680 m R78.00 R131 040 25 August 2023 R82.00 R25 830 Returns: (damaged stock) 25 May 2023 195 m R78,00 Closing balance (31 Dec 2023) 495 m ? ? Stock sent to the factory 4 125 m The previous bookkeeper prepared a factory overhead cost note but did not take into account the items listed below. Their total was R44 188. Note that the other cost accounts were adjusted accordingly. Rent Expense Water & Electricity Insurance Office sundry expenses 72 252 51 840 22 050 9 570 Rent must be allocated according to floor space occupied. The factory occupies 500 m², the sales department occupies 300 m² and the office occupies 100 m². 75% of the water and electricity relates to the factory. • Insurance on equipment is allocate in the ratio 3:2: 1 between the factory, sales and office departments. Note that insurance is a fixed monthly instalment and is paid for three months in advance. • 2/3 of the sundry expenses relates to the factory and the rest is office sundry expenses. EXTRACT FROM PRODUCTION COST STATEMENT Direct Material Cost Direct Labour Cost Factory Overhead Costs Total Fixed Cost Variable cost per unit 2023 2022 TOTAL (R) ? UNIT COST (R) UNIT COST (R) ? 42.00 171 675 32.70 26.50 ? ? 32.40 229 150 47.40 87.45 81.70 5 080 units 3 387 units ? 3 195 Number of units produced and sold Breakeven point EXTRACT FROM INCOME STATEMENT 2023 2022 TOTAL (R) | UNIT COST (R) | UNIT COST (R) Sales Cost of sales 751 840 ? 132,00 529 985 101,00 96,15 Gross Profit 221 855 41,55 35,85 Selling and distribution costs 86 625 16,50 13,50 Administration costs 71 662 13,70 15,00 Net Profit 63 568 12,51 7,35 ⚫ The selling price of a similar canvas bag from competitors is R149.00 per bag.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:INFORMATION
RAW MATERIAL STOCK
Meters
Cost per metre
Total amount
Opening Balance (1 Jan 2023)
Purchases
25 Feb 2023
600 m
R39 500
4 215 m
R316 710
2 220 m
R72.00
R159 840
25 May 2023
1 680 m
R78.00
R131 040
25 August 2023
R82.00
R25 830
Returns: (damaged stock)
25 May 2023
195 m
R78,00
Closing balance (31 Dec
2023)
495 m
?
?
Stock sent to the factory
4 125 m
The previous bookkeeper prepared a factory overhead cost note but did not take into account
the items listed below. Their total was R44 188. Note that the other cost accounts were
adjusted accordingly.
Rent Expense
Water & Electricity
Insurance
Office sundry expenses
72 252
51 840
22 050
9 570
Rent must be allocated according to floor space occupied. The factory occupies
500 m², the sales department occupies 300 m² and the office occupies 100 m².
75% of the water and electricity relates to the factory.
• Insurance on equipment is allocate in the ratio 3:2: 1 between the factory, sales and
office departments. Note that insurance is a fixed monthly instalment and is paid for
three months in advance.
• 2/3 of the sundry expenses relates to the factory and the rest is office sundry
expenses.
Transcribed Image Text:EXTRACT FROM PRODUCTION COST STATEMENT
Direct Material Cost
Direct Labour Cost
Factory Overhead Costs
Total Fixed Cost
Variable cost per unit
2023
2022
TOTAL (R)
?
UNIT COST (R)
UNIT COST (R)
?
42.00
171 675
32.70
26.50
?
?
32.40
229 150
47.40
87.45
81.70
5 080 units
3 387 units
?
3 195
Number of units produced and sold
Breakeven point
EXTRACT FROM INCOME STATEMENT
2023
2022
TOTAL (R) | UNIT COST (R) | UNIT COST (R)
Sales
Cost of sales
751 840
?
132,00
529 985
101,00
96,15
Gross Profit
221 855
41,55
35,85
Selling and distribution costs
86 625
16,50
13,50
Administration costs
71 662
13,70
15,00
Net Profit
63 568
12,51
7,35
⚫ The selling price of a similar canvas bag from competitors is R149.00 per bag.
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