Themba Ltd manufactures two types of soccer balls, namely Training and Match balls. Fixed manufacturing overheads (FMO) are allocated to products using activity-based costing (ABC). Below is the Activity area and the FMO applicable to this area. Activity area Set-up costs Machine costs Quality inspections Fixed manufacturing overheads R 480 000 1 600 500 800 000 • Set-up costs: The manufacturing machines need to be set up before each production run. The balls are manufactured in production runs and each independent Training production run contains 250 balls and each independent Match production run contains 100 balls. • Machine cost: Temba's production process is highly automated, and it takes 15 machine minutes and 24 machine minutes to manufacture one Training and one Match ball respectively. • Quality inspections: Every 10th Match ball and every 200th Training ball is quality inspected. • Temba manufactured 500 000 Training balls and 100 000 Match balls. The total machine cost allocated to Match balls is: Select one: a. R388 000,00 b. R266 750,00 C. R800 250,00 d. R984 923,08 e. None of the options

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Themba Ltd manufactures two types of soccer balls, namely Training and Match balls. Fixed
manufacturing overheads (FMO) are allocated to products using activity-based costing (ABC).
Below is the Activity area and the FMO applicable to this area.
Activity area
Set-up costs
Machine costs
Quality inspections
Fixed manufacturing
overheads
R
480 000
1 600 500
800 000
•
Set-up costs: The manufacturing machines need to be set up before each production run. The balls
are manufactured in production runs and each independent Training production run contains 250
balls and each independent Match production run contains 100 balls.
• Machine cost: Temba's production process is highly automated, and it takes 15 machine minutes
and 24 machine minutes to manufacture one Training and one Match ball respectively.
• Quality inspections: Every 10th Match ball and every 200th Training ball is quality inspected.
• Temba manufactured 500 000 Training balls and 100 000 Match balls.
The total machine cost allocated to Match balls is:
Select one:
a.
R388 000,00
b. R266 750,00
C.
R800 250,00
d. R984 923,08
e.
None of the options
Transcribed Image Text:Themba Ltd manufactures two types of soccer balls, namely Training and Match balls. Fixed manufacturing overheads (FMO) are allocated to products using activity-based costing (ABC). Below is the Activity area and the FMO applicable to this area. Activity area Set-up costs Machine costs Quality inspections Fixed manufacturing overheads R 480 000 1 600 500 800 000 • Set-up costs: The manufacturing machines need to be set up before each production run. The balls are manufactured in production runs and each independent Training production run contains 250 balls and each independent Match production run contains 100 balls. • Machine cost: Temba's production process is highly automated, and it takes 15 machine minutes and 24 machine minutes to manufacture one Training and one Match ball respectively. • Quality inspections: Every 10th Match ball and every 200th Training ball is quality inspected. • Temba manufactured 500 000 Training balls and 100 000 Match balls. The total machine cost allocated to Match balls is: Select one: a. R388 000,00 b. R266 750,00 C. R800 250,00 d. R984 923,08 e. None of the options
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