1. Elements of Cost (i) Total cost of products is made up of the following cost elements (3 marks): Direct material Direct wages Direct expenses Manufacturing overhead Administration overhead Selling overhead, and Distribution overhead From the above, indicate which cost elements make up the following cost category: Prime cost a. b. Production cost c. Works cost The following cost data are obtained from the books of a factory manufacturing a concrete product. The data are for the year ended 31 (ii) December 2010 (S) 90,000 75,000 60,900 52,500 42,000 45,000 Cost Data Direct material Direct wages Profit Selling & Distribution overhead Administrative overhead Factory overhead a) Prepare cost statement for the product, indicating prime cost, works cost, production cost and cost of sales value. (6 marks) b) In January 2011, the factory receives an order to produce another product. It is estimated that cost of direct materials will be $120,000 and direct labour will cost $85,000. What should be the sales value of the product if the factory intentis to eam the same rate of profit on total cost (as in 2010), assuming the selling and distribution overhead has gone up by 15%? (6 marks) (Note that the factory overhead is estimated as percentage of direct wages; administrative overhead as percentage of works cost, and selling and distribution overhead also. Of works cost. The percentages for 2011 is . As in 2010) 4