ANSWER ALL QUESTIONS

a) Xuxu ltd produces two products, desks and chairs in different production departments and the company incurs four distinct types of overheads as listed below:

1. business rates (2 marks)
2. salary of credit controller (2 marks)
3. machine insurance (2 marks)
4. canteen costs (2 marks)

Required: Identify the most appropriate basis for apportioning each of these overheads between the two different production departments?

b) The costs of the process are as follows for Thuto Ltd:

Process 1

P

Direct materials 3 000

Direct labour 500

Direct expenses 1 000

Production overhead 500

The input quantity was 250 kg and the expected or normal loss was 10 per cent of input. Actual output was 225 kg.

Required:

1. Define process costing (2 marks)
2. Explain the meaning of normal loss (2 marks)
3. Prepare the process account (8 marks)

   ANSWER ALL QUESTIONS

   a) Xuxu ltd produces two products, desks and chairs in different production departments and the company incurs four distinct types of overheads as listed below:

4. business rates (2 marks)
5. salary of credit controller (2 marks)
6. machine insurance (2 marks)
7. canteen costs (2 marks)

8. Required: Identify the most appropriate basis for apportioning each of these overheads between the two different production departments?

   b) The costs of the process are as follows for Thuto Ltd:

   Process 1

   P

   Direct materials 3 000

   Direct labour 500

   Direct expenses 1 000

   Production overhead 500

   The input quantity was 250 kg and the expected or normal loss was 10 per cent of input. Actual output was 225 kg.

   Required:

9. Define process costing (2 marks)
10. Explain the meaning of normal loss (2 marks)
11. Prepare the process account (8 marks)