Themba Ltd manufactures two types of soccer balls, namely Training and Match balls. Fixedmanufacturing overheads (FMO) are allocated to products using activity-based costing (ABC).Below is the Activity area and the FMO applicable to this area.Activity areaSet-up costsMachine costsQuality inspectionsFixed manufacturingoverheadsR480 0001 600 500800 000•Set-up costs: The manufacturing machines need to be set up before each production run. The ballsare manufactured in production runs and each independent Training production run contains 250balls and each independent Match production run contains 100 balls.• Machine cost: Temba's production process is highly automated, and it takes 15 machine minutesand 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 000,00b. R266 750,00C.R800 250,00d. R984 923,08e.None of the options

The objective of the question is to calculate the total machine cost allocated to Match balls…

Answered: Themba Ltd manufactures two types 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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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 quality inspection…
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