SimpleStudy Schools Book a Demo We can give expert advice on our plans and what will be the best option for your school.
Parents Pricing Home NSC Accounting Important concepts of manufacturing WEZA STITCHES
Weza Stitches, owned by Annie Brown, manufactures bathroom towel sets
WEZA STITCHES
Weza Stitches, owned by Annie Brown, manufactures bathroom towel sets - NSC Accounting - Question 1 - 2022 - Paper 2 Question 1
View full question WEZA STITCHES
Weza Stitches, owned by Annie Brown, manufactures bathroom towel sets. Annie buys fabric from local suppliers. Their information relates to the financ... show full transcript
View marking scheme Worked Solution & Example Answer:WEZA STITCHES
Weza Stitches, owned by Annie Brown, manufactures bathroom towel sets - NSC Accounting - Question 1 - 2022 - Paper 2
1. Calculate the following for the financial year ended 30 June 2022: Direct labour cost Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
To calculate the total direct labour cost, we take into account that six workers were employed, each working 1,840 hours at R40 per hour:
e x t D i r e c t L a b o u r C o s t = e x t N u m b e r o f w o r k e r s i m e s e x t H o u r s w o r k e d i m e s e x t R a t e p e r h o u r = 6 i m e s 1840 i m e s 40 = R 440 , 800. ext{Direct Labour Cost} = ext{Number of workers} imes ext{Hours worked} imes ext{Rate per hour}
= 6 imes 1840 imes 40 = R440,800. e x t D i rec t L ab o u r C os t = e x t N u mb ero f w or k ers im ese x t Ho u rs w or k e d im ese x t R a t e p er h o u r = 6 im es 1840 im es 40 = R 440 , 800.
1. Calculate the following for the financial year ended 30 June 2022: Factory overhead cost Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
The factory overhead cost, corrected for errors, is calculated as follows:
Originally calculated: R541,600.
Adjustments:
The bookkeeper included 100% of insurance expenses, while only 60% should have been considered:
e x t C o r r e c t e d O v e r h e a d = R 541 , 600 − ( R 32 , 500 − 0.6 i m e s R 32 , 500 ) + R 54 , 000. ext{Corrected Overhead} = R541,600 - (R32,500 - 0.6 imes R32,500) + R54,000. e x t C orrec t e d O v er h e a d = R 541 , 600 − ( R 32 , 500 − 0.6 im es R 32 , 500 ) + R 54 , 000. This means the revised total is R541,600 - R13,000 + R54,000 = R582,600.
1. Calculate the following for the financial year ended 30 June 2022: Total cost of production Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
The total cost of production combines direct materials, direct labor, and corrected factory overhead costs:
e x t T o t a l c o s t o f p r o d u c t i o n = e x t D i r e c t M a t e r i a l s + e x t D i r e c t L a b o u r + e x t F a c t o r y O v e r h e a d = R 652 , 800 + R 440 , 800 + R 582 , 600 = R 1 , 676 , 200. ext{Total cost of production} = ext{Direct Materials} + ext{Direct Labour} + ext{Factory Overhead}
= R652,800 + R440,800 + R582,600 = R1,676,200. e x t T o t a l cos t o f p ro d u c t i o n = e x t D i rec tM a t er ia l s + e x t D i rec t L ab o u r + e x t F a c t ory O v er h e a d = R 652 , 800 + R 440 , 800 + R 582 , 600 = R 1 , 676 , 200.
2. Explain why she should not be concerned. Provide TWO points. Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Fixed costs often do not fluctuate in the short term. The increase may be reflective of investments that can lead to higher production efficiency.
The overall return on investment can be expected to rise, especially if the production output increases, which may offset the fixed cost increase.
3. Comment on whether the production staff deserves the production bonus that they received. Provide THREE points, with figures. Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Production Increase : Production increased from 5,250 to 6,400 units, a rise of 1,150 units, demonstrating enhanced productivity by 21.9%.
BEP Decrease : The break-even point decreased from 6,954 to 6,156 units, a drop of 798 units or by 11.5%, indicating improved efficiency.
Cost Efficiency : The direct material cost per unit fell from R128 to R102, a reduction of R26 (20.3%), showing better utilization of resources.
4. Calculate the additional units that must be produced to achieve this target. Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
To determine the extra units required to increase profit by R50,000 while maintaining costs:
e x t R e q u i r e d P r o f i t = R 50 , 000 , e x t S e l l i n g P r i c e p e r U n i t = R 375 , e x t C u r r e n t P r o f i t p e r U n i t = R 375 − R 244 = R 131. ext{Required Profit} = R50,000,
ext{Selling Price per Unit} = R375,
ext{Current Profit per Unit} = R375 - R244 = R131. e x t R e q u i re d P ro f i t = R 50 , 000 , e x t S e ll in g P r i ce p er U ni t = R 375 , e x t C u rre n tP ro f i tp er U ni t = R 375 − R 244 = R 131. ext{Additional Units} = rac{ ext{Required Profit}}{ ext{Profit per Unit}} = rac{50,000}{131}
ightarrow ext{Approximately 382 units needed.} Join the NSC students using SimpleStudy...97% of StudentsReport Improved Results
98% of StudentsRecommend to friends
100,000+ Students Supported
1 Million+ Questions answered
© 2025 SimpleStudy. All rights reserved
