Photo AI
3.1 Complete each of the following sentences by filling in the missing word(s) - NSC Accounting - Question 3 - 2022 - Paper 2
Question 3
3.1 Complete each of the following sentences by filling in the missing word(s). Write only the word(s) next to the question numbers (3.1.1 to 3.1.3) in the ANSWER BO... show full transcript
Worked Solution & Example Answer:3.1 Complete each of the following sentences by filling in the missing word(s) - NSC Accounting - Question 3 - 2022 - Paper 2
Step 1
3.2.1 Calculate the value of the closing stock of pots on 28 February 2022.
Answer
To calculate the value of the closing stock of pots, utilize the weighted-average method. Begin with the formula:
Using the given figures:
- Number of units = 800 + 700 = 1500
- Total Cost = R1,936,000 (initial stock) + R1,712,000 (purchases) = R3,648,000
- Average Cost per Unit = Total Cost / Total Units = R3,648,000 / 1500 units
Substituting the figures:
- Average Cost per Unit = R2,432
- Closing Stock Value = Closing Stock (number of units) x Average Cost = 980 units x R2,432 = R344,960
Step 2
3.2.2 Lerato is unsure how long it will take to sell the closing stock of pots. Provide a calculation to address her concern.
Answer
To determine how long it will take to sell the closing stock of pots, the formula used is:
ext{Days to Sell} = rac{ ext{Closing Stock}}{ ext{Daily Sales Rate}}Using the data:
- Closing Stock = 980 units
- Daily Sales Rate = 980 units / 365 days = 2.68 units/day
- Days to Sell = 980 / 2.68 = 365 days
This indicates that it will take approximately 365 days to sell the closing stock of pots.
Step 3
3.2.2 Explain whether the period calculated is acceptable, or not.
Answer
A selling period of 365 days is generally considered long for cooking pots, which are durable goods. If pots have a long shelf-life and consistent demand, this period could be acceptable. However, any significant delay or seasonal factors may create risk, requiring constant monitoring of stock to avoid obsolescence. Thus, determining the demand and market conditions is crucial.
Step 4
3.2.3 Calculate the number of pots missing.
Answer
To calculate the number of pots missing, we find the difference between the initial stock and the stock recorded:
Given the figures:
- Initial stock = 800 + 700 = 1500 units
- Recorded stock = 980 units
Thus, the calculation is:
- Missing Pots = 1500 units - 980 units = 250 pots.
Step 5
3.2.4 Calculate the value of the closing stock of microwave ovens.
Answer
To determine the value of the closing stock for microwave ovens, separate calculations for each model (Swift and Delta) must be made:
For Swift:
- Opening Stock = 380 units at R750/unit = R285,000
- Add Purchases = 2800 units at R1,056/unit = R2,956,800
- Less Sales = Closing stock would be 765 units valued at recent average cost.
- Closing Value = Remaining stock value combined with opening stock.
For Delta:
- Opening Stock = 630 units at R600/unit = R378,000
- Calculate remaining stock from total sales and purchases.
Combine final values for both models to give overall closing stock amount.
Step 6
3.2.5 Give TWO reasons in favor of this decision and ONE reason against this decision.
Answer
Reasons in favor of discontinuing the Delta model:
- High Return Risk: The Delta model has consistently shown higher rates of returns due to perceived poor quality, which could impact brand reputation.
- Low Sales Volume: The sales volume for Delta has been notably low (63.7% market share), indicating consumers prefer alternative models.
Reason against discontinuing:
- Market Demand: Rapid fluctuations in consumer demand could change visibility for Delta, and stopping production might close future opportunities if new marketing strategies raise sales.