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5.1 Indicate whether the following statements are True or False - NSC Accounting - Question 5 - 2017 - Paper 1
Question 5
5.1 Indicate whether the following statements are True or False. Write only the answer next to the question numbers (5.1.1–5.1.3) in the ANSWER BOOK. 5.1.1 The sala... show full transcript
Worked Solution & Example Answer:5.1 Indicate whether the following statements are True or False - NSC Accounting - Question 5 - 2017 - Paper 1
Step 1
Calculate the direct labour cost.
Answer
To calculate the direct labour cost, follow these steps:
-
Calculate the total normal wages:
Number of workers = 5
Normal hours per worker = 1,800
Normal hourly rate = R70Total normal wages = Number of workers * Normal hours per worker * Normal hourly rate
Total normal wages = 5 * 1,800 * 70 = R630,000
-
Calculate overtime wages:
Overtime hours = 660
Overtime rate = 1.6 * Normal hourly rate = 1.6 * R70 = R112Total overtime wages = Overtime hours * Overtime rate
= 660 * 112 = R73,920 -
Calculate the employer’s contributions:
Employer contribution = 9% of the normal wages
= 630,000 * 0.09 = R56,700 -
Total direct labour cost = Total normal wages + Total overtime wages + Employer contribution
= 630,000 + 73,920 + 56,700 = R760,620
Step 2
Calculate Factory Plant and Equipment.
Answer
To calculate the Factory Plant and Equipment, we follow:
-
Calculate the carrying value:
- Old equipment was disposed of for R6,500, which resulted in a loss of R2,500.
Thus, the lost value of old equipment = Disposal value + Loss = 6,500 + 2,500 = R9,000
-
Calculate new depreciation:
- The new value for the factory plant and equipment after disposals = Cost (beginning) - Old loss
= R420,000 - 9,000 = R411,000
- The new value for the factory plant and equipment after disposals = Cost (beginning) - Old loss
-
Calculate the accumulated depreciation for the new year:
- Depreciation = 15% of Cost
= 15% of R411,000 = R61,650
- Depreciation = 15% of Cost
-
Calculate total depreciation and contribution:
- Accumulated depreciation = Previous + Current Depreciation
= (R198,000 + 61,650) = R259,650
- Accumulated depreciation = Previous + Current Depreciation
-
Thus, Cost = R411,000 - R259,650 = R151,350.
Step 3
Prepare the Factory Overhead Cost note.
Answer
To prepare the Factory Overhead Cost note:
-
List all components:
- Indirect labour = R300,000
- Indirect material = R52,750
- Water and electricity (60% of R98,700) = R59,220
- Insurance = 60% of R32,300 = R17,700
- Rent expense = 60% of R102,000 = R61,200
- Depreciation calculated above = R62,850
- Factory sundry expenses = R19,150
-
Total the overhead cost:
- Total Factory Overhead Cost = R300,000 + R52,750 + R59,220 + R17,700 + R61,200 + R62,850 + R19,150
= R582,000.
- Total Factory Overhead Cost = R300,000 + R52,750 + R59,220 + R17,700 + R61,200 + R62,850 + R19,150
Step 4