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

Question

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 Bad debts are an administration cost.

1.1.2 Indirect labour is a factory overhead cost.

1.1.3 Rent expense is a fixed cost.

1.2 KRIGE SHIRTS

The business manufactures shirts. The financial year-end is 31 July 2018.

REQUIRED:

1.2.1 Refer to Information C.

Calculate direct labour cost.

1.2.2 Production Cost Statement for the year ended 31 July 2018.

INFORMATION:

A. Work-in-progress stock balance
   31 JULY 2018    1 AUGUST 2017
    ?      R35 570

B. Raw materials issued to factory: R528 300

C. Direct labour:
   Number of factory workers          4
   Normal time expected per worker per year            1 960 hours
   Normal rate                       R90 per hour
   Bonuses to workers: 12% of normal wages
   NOTE: One worker worked only 1 680 hours and received a reduced bonus of R12 146.

D. Factory overheads were calculated at R360 880 for the year. However, this excludes insurance of R48 750 paid for the period 1 August 2017 to 31 August 2018. Insurance must be allocated to the factory, administration and sales in the ratio 4 : 3 : 2.

E. Production for the year: 17 500 shirts at a cost of R95 per shirt.

1.1 Indicate whether the following statements are TRUE or FALSE - NSC Accounting - Question 1 - 2018 - Paper 1

Worked Solution & Example Answer:1.1 Indicate whether the following statements are TRUE or FALSE - NSC Accounting - Question 1 - 2018 - Paper 1

1.2.1 Refer to Information C.

1.2.2 Production Cost Statement for the year ended 31 July 2018.

Join the NSC students using SimpleStudy...