1.1 Indicate whether the following statements are TRUE or FALSE. Write only 'true' or 'false' next to the question numbers (1.1.1 to 1.1.3) in the ANSWER BOOK. 1.1.1 Wages of factory cleaners is a direct labour cost. 1.1.2 Delivery costs of finished goods to retailers are a selling and distribution cost. 1.1.3 Depreciation on office equipment is an administration cost. 1.2 DESKS FACTORY REQUIRED: 1.2.1 Complete the Factory Overhead Cost Note. 1.2.2 Calculate the total cost of production of finished goods. 1.2.3 Sihel wants to produce an additional 1 500 desks, while maintaining the selling price and costs. Calculate the additional profit he can expect. 1.3 CHAIRS FACTORY REQUIRED: 1.3.1 Provide a calculation to confirm the break-even point for 2019. 1.3.2 Comment on the break-even point and the production level achieved. Quote figures. 1.3.3 Sihel feels that the wood raw material was not well controlled. Provide a calculation. METRES: Actual issue: 22 000 m² Budget: 16 000 m² x 1.2 = 19 200 m² OR: Sales: 22 800 x 2 800 for marks. 1.3.4 Give TWO reasons for the increase in direct labour cost. Provide a solution for EACH. Note that wages and salaries increased by 15% in the current financial year.

NSC Accounting Important concepts of manufacturing: 1.1 Indicate whether the followi

1.1 Indicate whether the following statements are TRUE or FALSE - NSC Accounting - Question 1 - 2019 - Paper 1

Question 1

1.1 Indicate whether the following statements are TRUE or FALSE. Write only 'true' or 'false' next to the question numbers (1.1.1 to 1.1.3) in the ANSWER BOOK. 1.1.... show full transcript

Worked Solution & Example Answer:1.1 Indicate whether the following statements are TRUE or FALSE - NSC Accounting - Question 1 - 2019 - Paper 1

Step 1

1.1.1 Wages of factory cleaners is a direct labour cost.

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Answer

False. Wages for factory cleaners are classified as indirect labor costs because they are not directly involved in the production process.

Step 2

1.1.2 Delivery costs of finished goods to retailers are a selling and distribution cost.

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True. Delivery costs incurred to send finished goods to retailers fall under selling and distribution expenses.

Step 3

1.1.3 Depreciation on office equipment is an administration cost.

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Answer

True. Depreciation on office equipment is categorized as an administrative expense as it pertains to the costs of running the office.

Step 4

1.2.1 Complete the Factory Overhead Cost Note.

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Answer

To complete the Factory Overhead Cost Note, include all indirect costs such as depreciation, insurance, and utilities attributed to manufacturing.

Step 5

1.2.2 Calculate the total cost of production of finished goods.

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Total cost of production is calculated by summing direct costs (materials and labor) and indirect costs (overhead).

Step 6

1.2.3 Calculate the additional profit he can expect.

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Answer

To calculate the additional profit from producing 1,500 additional desks, determine the selling price and variable costs per desk. Use the formula:

ext{Additional Profit} = ( ext{Selling Price} - ext{Variable Cost}) imes 1500

Step 7

1.3.1 Provide a calculation to confirm the break-even point for 2019.

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The break-even point can be found using the formula:

ext{Break-even Point (units)} = rac{ ext{Fixed Costs}}{ ext{Selling Price} - ext{Variable Cost}}

Step 8

1.3.2 Comment on the break-even point and the production level achieved. Quote figures.

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Compare the break-even point with the actual production to assess profitability and insight into operational efficiency.

Step 9

1.3.3 Provide a calculation to support Sihel's opinion on raw material control.

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To support Sihel's opinion, calculate the variance between actual wood usage and budgeted wood. Use the formula to analyze possible losses.

Step 10

1.3.4 Give TWO reasons for the increase in direct labour cost. Provide a solution for EACH.

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Possible reasons for the increase in direct labor costs include:

Increased hourly wages due to labor shortages. Solution: Invest in employee retention programs.
Higher overtime costs due to increased production demand. Solution: Implement better production planning to reduce overtime.

1.1 Indicate whether the following statements are TRUE or FALSE - NSC Accounting - Question 1 - 2019 - Paper 1

Worked Solution & Example Answer:1.1 Indicate whether the following statements are TRUE or FALSE - NSC Accounting - Question 1 - 2019 - Paper 1

1.1.1 Wages of factory cleaners is a direct labour cost.

1.1.2 Delivery costs of finished goods to retailers are a selling and distribution cost.

1.1.3 Depreciation on office equipment is an administration cost.

1.2.1 Complete the Factory Overhead Cost Note.

1.2.2 Calculate the total cost of production of finished goods.

1.2.3 Calculate the additional profit he can expect.

1.3.1 Provide a calculation to confirm the break-even point for 2019.

1.3.2 Comment on the break-even point and the production level achieved. Quote figures.

1.3.3 Provide a calculation to support Sihel's opinion on raw material control.

1.3.4 Give TWO reasons for the increase in direct labour cost. Provide a solution for EACH.

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