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2 . 9 Established in 2 0 1 0 , Severn Manufacturers is one of South Africa's leading designers and manufacturers of custom - made

2.9 Established in 2010, Severn Manufacturers is one of South Africa's leading designers and manufacturers of custom-made cosmetic and toiletry bags. The company manufactured 20000 units during the quarter ended 31 March 20X1. The factory has maximum capacity to manufacture 21500 units per quarter. Additional space is required when more than 21500 units are planned. Extra capacity is available at R2000 per month. The following costs for the three months ended 31 March 20X1 appeared in the books of Severn Manufacturers:
Direct material costs of R180000 were incurred.
Direct wages of R220000 were paid.
The rent for the factory building was R6000 for the quarter.
Other manufacturing overheads for the period were R39750, of which R18000 was fixed.
Due to recent change in sales policy, the company introduced door-to-door sales. Commission of R13900 was paid to the sales agent. Rent of R22000 was paid for the sales office located in Ballito.
Required:
Calculate the following:
(a) Prime cost per unit for the quarter ended 31 March 20X1.
(b) Conversion costs incurred during the quarter ended 31 March 20X1.
(c) Total period costs for the quarter ended 31 March 20X1.
(d) Expected fixed costs per unit for the expected production level of 22000 units for the forthcoming quarter.
(e) Expected total production costs for the expected production level of 22000 units for the forthcoming quarter.
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