Calculate the total fixed manufacturing (production) cost 7.The following information relates to the company's manufacturing process:Rental of the factory is R10 000 per month.2.Electricity in the frctory is R5 000 per month. Electricity is used evenly throughout thefactory.3.The factory is can produce 100 surfboards a month, it currently operates at 30 %capacity.4.The factory foreman's wages are R1 000 per week.5.Labourers working on the factory line get paid per unit produced and earn R1 000 persurfboard.6.Commission of 4% on the selling price of each unit sold is given to the salesrepresentative who makes the sale. All products are sold within the month they aremanufactured.Each unit has packaging costs of R100. Packaging is classified as indirect materials.8.Advertising and marketing costs amount to R4 000 per month for all surfboardsproduced.9.Administrative staff (Sue who takes the orders and Jane who is the accountant) earnR3 000 each per month; they are support staff for all surfboards produced. 10.Each board is covered in wax during production, each tin of wax costs R600 and cancover 50 surfboards.11.The material used to mould the surfboard comes in a liquid form. A 10 litre tin costsR1 000 and makes two surfbcards.12.Surfs Up pays a local surfer R2 500 per month to promote their surfboards.13.A surfboard sells for R3 800.

The question is based on the concept of Cost Acounting.

ny's manufacturing process: onth. month. Electricity is used evenly throughout the fboards a month, it currently operates at 30% 0 per week. get paid per unit produced and earn R1 000 per price of each unit sold is given to the sales Ali products are sold within the month they are Packaging is classified as indirect materials. ount to R4 000 per month for all surfboards he orders and Jane who is the accountant) earn ort staff for all surfboards produced.

ny's manufacturing process: onth. month. Electricity is used evenly throughout the fboards a month, it currently operates at 30% 0 per week. get paid per unit produced and earn R1 000 per price of each unit sold is given to the sales Ali products are sold within the month they are Packaging is classified as indirect materials. ount to R4 000 per month for all surfboards he orders and Jane who is the accountant) earn ort staff for all surfboards produced.

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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