GEVEN MANUFACTURERS The business produces wooden tables - NSC Accounting - Question 2 - 2017 - Paper 1

To create the Production Cost Statement, we begin by identifying the components involved:

1. Direct Material Cost: The direct material cost is given as R1,050,000. However, we need to adjust for the EZ Transport allocation which was miscategorized. We will add R102,000 to this:

   $ext{Adjusted Direct Material Cost} = R1,050,000 + R102,000 = R1,152,000$

2. Direct Labour Cost: From the information, prime cost after adjustments is R1,800,000. The total of known expenses excluding direct labor (Adjusted Direct Material Cost + Factory Overheads + Selling and Distribution) needs to be calculated:

   $ext{Total Expenses} = (R1,152,000 + R487,200 + R422,000) = R2,061,200$

   Therefore, the direct labor cost:

   $ext{Direct Labour} = R1,800,000 - R2,061,200 = ?$

   (This requires additional calculation with other components to consolidate and finalize the answer.)

3. Factory Overhead Costs: The overheads are already provided as R487,200.

4. Work-in-Process: To find the work-in-process, we need to set up the total production calculations. Given we produced 7,200 tables, and the ending inventory is calculated at FIFO:

   $ext{Finished Goods} = 400 ext{ tables} ext{ (value of 1,200 at R280)}$

5. Final Production Cost Statement:

   • Total production = R2,376,000
   • Finalize by tabulating all components.