Stainless Mixers Ltd supply compound to the steel pipe manufacturers. The company has two compound mixers, each with a 100% capacity (40 hours) of 20 tons per week. Due to load shedding, the current operating capacity is 75%. One ton of compound consists of 200kg of product A and 500 kg of product B. Ignore any wastage. Product A is purchased at R45/kg and product B at R25/kg. Each mixer requires two operators. Assume four weeks per month. All materials purchased are used in the mix of compound and all compound mixed is sold in the month it is mixed. The mixing plant takes up 70% of the total floor space. The following is an extract of some of the transactions for the month. Product Cost Period Cost Direct Material Direct Labour Manufacturing Overheads Admin Cost Marketing/ Distribution/ Selling Cost 1 Purchase the required quantity of product A for the month. 2 Purchase the required quantity of product B for the month. 3 The mixer operators earn R1500 per week. 4 The storeman’s salary is R4000 per month. 5 Depreciation per mixer per annum amounts to R60 000. 6 Rates and Taxes amount to R10 000 per month. Apportion the cost according to floor space. 7 Each mixer requires 1 litre of oil per 10- hour operation. Oil costs R150 per litre. 8 The accountant earns R8 000 per month. 9 Distribution costs amount to R120 per 10- ton delivered. 10 The foreman’s salary amounts to R2200 per week. REQUIRED: Calculate the total number of tons mixed per month. Complete the above table by using monthly cost figures. Clearly indicate the type of cost for each transaction (ie. fill in the correct value in the appropriate column). Show all workings.
Stainless Mixers Ltd supply compound to the steel pipe manufacturers. The company has two compound mixers, each with a 100% capacity (40 hours) of 20 tons per week. Due to load shedding, the current operating capacity is 75%. One ton of compound consists of 200kg of product A and 500 kg of product B. Ignore any wastage. Product A is purchased at R45/kg and product B at R25/kg. Each mixer requires two operators. Assume four weeks per month. All materials purchased are used in the mix of compound and all compound mixed is sold in the month it is mixed. The mixing plant takes up 70% of the total floor space.
The following is an extract of some of the transactions for the month.
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Product Cost |
Period Cost |
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Direct Material |
Direct Labour |
Manufacturing |
Admin Cost |
Marketing/ Distribution/ Selling Cost |
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1 |
Purchase the required quantity of product A for the month. |
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2 |
Purchase the required quantity of product B for the month. |
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3 |
The mixer operators earn R1500 per week. |
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4 |
The storeman’s salary is R4000 per month. |
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5 |
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6 |
Rates and Taxes amount to R10 000 per month. Apportion the cost according to floor space. |
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7 |
Each mixer requires 1 litre of oil per 10- hour operation. Oil costs R150 per litre. |
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8 |
The accountant earns R8 000 per month. |
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9 |
Distribution costs amount to R120 per 10- ton delivered. |
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10 |
The foreman’s salary amounts to R2200 per week. |
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REQUIRED:
- Calculate the total number of tons mixed per month.
- Complete the above table by using monthly cost figures.
Clearly indicate the type of cost for each transaction (ie. fill in the correct value in the appropriate column).
Show all workings.
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