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Use the following information to answer questions 17, 18, 19 and 20: Camanvon Caps (Pty) Ltd "Camarvon Caps)manufactures and sells two types of headwear, namely the Cricket Hat (CH) and the Fashion Visor (Visor). The company has a 31 December year-end. On 31 December 2019, Camarvon Caps had 5 000 units of CH and 8 000 units of Visor on hand. Depending on whether direct or absorption costing principles were applied, the following inventory values would be associated with these units: CH Visor Direct costing value Absorption costing value R320 000 R720 000 Details of the actual manufacturing costs for the financial year ended 31 December 2020 were as foliows

Use the following information to answer questions 17, 18, 19 and 20: Camanvon Caps (Pty) Ltd "Camarvon Caps)manufactures and sells two types of headwear, namely the Cricket Hat (CH) and the Fashion Visor (Visor). The company has a 31 December year-end. On 31 December 2019, Camarvon Caps had 5 000 units of CH and 8 000 units of Visor on hand. Depending on whether direct or absorption costing principles were applied, the following inventory values would be associated with these units: CH Visor Direct costing value Absorption costing value R320 000 R720 000 Details of the actual manufacturing costs for the financial year ended 31 December 2020 were as foliows

FINANCIAL ACCOUNTING
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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Use the following information to answer questions 17, 18, 19 and 20: Camarvon Caps (Pty) Ltd ("Camarvon Caps") manufactures and sells two types of headwear, namely the Cricket Hat (CH) and the Fashion Visor ("Visor"). The company has a 31 December year-end. On 31 December 2019, Camarvon Caps had 5 000 units of CH and 8 000 units of Visor on hand. Depending on whether direct or absorption costing principles were applied, the following inventory values would be associated with these units: CH Visor R320 000 Direct costing value Absorption costing value R720 000 Details of the actual manufacturing costs for the financial year ended 31 December 2020 were as follows: • Direct material costs of R25 per unit of CH and R40 per unit of Visor were incurred. Other direct costs in the form of packaging costs were incured at R5 per unit, irrespective of product type. Direct labour costs of R21 per unit and R32 per unit were incurred for CH and Visor, respectively. Variable manufacturing overheads ofR19 per unit of CH and R18 per unit of Visor were incurred. 13 МАC2601/103 Details of the actual non-manufacturing costs for the financial year ended 31 December 2020 were as follows: • Variable selling costs in the form of sales commission were inaurred at R3 per unit, irrespective of product type. • Total fixed administration costs amounted to R1 000 000 and R800 000 for CH and Visor, respectively. Additional information: • CH sells at R120 per unit and Visor sells at R160 per unit. During the 2020 financial year, 85 000 units of CH were produced and 82 000 sold, whereas 58 000 units of Visor were produced and 54 000 sold. • The predetemined blanket overhead rate for the 2019 financial year was R9 per unit and increased to R10 per unit for the 2020 financial year. The management accountant of Camarvon Caps remembers correctiy from her MAC2601 studies that applied fixed manufacturing overheads are included in product costs when absorption costing principles apply. Camarvon Caps uses the First-In-First-Out (FIFO) method of inventory valuation.
Transcribed Image Text:Use the following information to answer questions 17, 18, 19 and 20: Camarvon Caps (Pty) Ltd ("Camarvon Caps") manufactures and sells two types of headwear, namely the Cricket Hat (CH) and the Fashion Visor ("Visor"). The company has a 31 December year-end. On 31 December 2019, Camarvon Caps had 5 000 units of CH and 8 000 units of Visor on hand. Depending on whether direct or absorption costing principles were applied, the following inventory values would be associated with these units: CH Visor R320 000 Direct costing value Absorption costing value R720 000 Details of the actual manufacturing costs for the financial year ended 31 December 2020 were as follows: • Direct material costs of R25 per unit of CH and R40 per unit of Visor were incurred. Other direct costs in the form of packaging costs were incured at R5 per unit, irrespective of product type. Direct labour costs of R21 per unit and R32 per unit were incurred for CH and Visor, respectively. Variable manufacturing overheads ofR19 per unit of CH and R18 per unit of Visor were incurred. 13 МАC2601/103 Details of the actual non-manufacturing costs for the financial year ended 31 December 2020 were as follows: • Variable selling costs in the form of sales commission were inaurred at R3 per unit, irrespective of product type. • Total fixed administration costs amounted to R1 000 000 and R800 000 for CH and Visor, respectively. Additional information: • CH sells at R120 per unit and Visor sells at R160 per unit. During the 2020 financial year, 85 000 units of CH were produced and 82 000 sold, whereas 58 000 units of Visor were produced and 54 000 sold. • The predetemined blanket overhead rate for the 2019 financial year was R9 per unit and increased to R10 per unit for the 2020 financial year. The management accountant of Camarvon Caps remembers correctiy from her MAC2601 studies that applied fixed manufacturing overheads are included in product costs when absorption costing principles apply. Camarvon Caps uses the First-In-First-Out (FIFO) method of inventory valuation.
MAC2601/103 QUESTION 20 The actual gross profit per unit of the Visor is for the 2020 financial year. (1) (2) R70 R40 R103 (3) (4) R57
Transcribed Image Text:MAC2601/103 QUESTION 20 The actual gross profit per unit of the Visor is for the 2020 financial year. (1) (2) R70 R40 R103 (3) (4) R57
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