Masakhane Toys

Cost of Materials

Number of toys produced

Total cost of materials

60,000

R18,000

120,000

36,000

150,000

45,000

What is the materials cost per unit of output?

a. R0.20

b. R0.30

c. R0.50

d. R0.70

7.Katlego Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected as follows:

Month

Lease cost

Machine hours

April

R15,000

800

May

10,000

600

June

12,000

770

July

16000

1000

Using the high-low method, calculate the variable rate for the lease cost.

a. R25

b. R15

c. R65

d. R59

8. Amanzi Company applies Overhead based on Direct Labour hours. At The beginning of the year, Amanzi estimates Overhead to be R700 000, Machine hours to be R200000 and Direct labour hours to be R35000. During the year Amanzi has R5000 Direct labour hours and 10 000 Machine hours

What is the Predetermined Overhead rate?

a. R15.00 per machine hour

b. R14.00 per direct labour hour

c. R20.00 per direct labor hour

d. R18.00 per machine hour

e. None of these are correct.

9.Use the same information as in question 8, what is the amount of Overhead applied for February?

What is the amount of overhead applied for February?

a. R69,500

b. R22,000

c. R124,000

d. R185,200

e. R100,000

10. Which of the following statements describes a characteristic of overhead costs?

a. Overhead costs are distorted due to uneven production from period to period.

b. Overhead costs have a direct relationship with units produced like direct material

c. High production in a month leads to high unit overhead costs.

d. All of these are correct.

e. None of these are correct.