Long questions 14.21 Beta Ltd manufactures only one product and uses a direct costing system based on FIFO for the allocation of costs and internal reporting. Results and relevant information for the year were as follows: R Opening inventory: Raw materials 50 000 10 000 Finished products (75% fixed costs) 120 000 Raw material purchased 510 000 Raw material consumed 505 000 Direct labour (300 000 hours x R2.25) 675 000 Factory overheads incurred: Variable 170 000 Fixed 780 000 Administrative and sales expenses: Variable 60 500 Fixed 160 000 During the year 90 000 units were completed and sales amounted to 85 000 units at R26 per unit. Required: 14.21.1 Compile statements of comprehensive income using: the direct costing method, and (10) the absorption cost method. (8) 14.21.2 Reconcile the profits. (2) a) b) 14.22 Omega Ltd produces a single product and started operation on 1 January 2016. The following information is available: Variable costs per unit R20.00 Direct material R10.00 Direct labour R 4.00 Variable manufacturing overheads R 1.00 Fixed costs per annum: Manufacturing overheads R 90 000 Non-manufacturing overheads R200 000 Normal production is 40 000 units per annum. Sales price is R80.00 per unit. For 2016, production amounted to 40 000 units while sales amounted to 30 000 units. Required: 14.22.1 Compile statements of comprehensive for income for 2016 using: a) the direct costing method, and (9) b) the absorption cost method. (8) 14.22.2 Reconcile the profits. Long questions 14.21 Beta Ltd manufactures only one product and uses a direct costing system based on FIFO for the allocation of costs and internal reporting. Results and relevant information for the year were as follows: R Opening inventory: Raw materials 50 000 10 000 Finished products (75% fixed costs) 120 000 Raw material purchased 510 000 Raw material consumed 505 000 Direct labour (300 000 hours x R2.25) 675 000 Factory overheads incurred: Variable 170 000 Fixed 780 000 Administrative and sales expenses: Variable 60 500 Fixed 160 000 During the year 90 000 units were completed and sales amounted to 85 000 units at R26 per unit. Required: 14.21.1 Compile statements of comprehensive income using: the direct costing method, and (10) the absorption cost method. (8) 14.21.2 Reconcile the profits. (2) a) b) 14.22 Omega Ltd produces a single product and started operation on 1 January 2016. The following information is available: Variable costs per unit R20.00 Direct material R10.00 Direct labour R 4.00 Variable manufacturing overheads R 1.00 Fixed costs per annum: Manufacturing overheads R 90 000 Non-manufacturing overheads R200 000 Normal production is 40 000 units per annum. Sales price is R80.00 per unit. For 2016, production amounted to 40 000 units while sales amounted to 30 000 units. Required: 14.22.1 Compile statements of comprehensive for income for 2016 using: a) the direct costing method, and (9) b) the absorption cost method. (8) 14.22.2 Reconcile the profits