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Nekoachemo Ltd is a well-established company which was established 35 years ago. The financial year-end is 30 April each year. The company purchases logs of

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Nekoachemo Ltd is a well-established company which was established 35 years ago. The financial year-end is 30 April each year. The company purchases logs of wood and prepares them for sale to other companies which uses these prepared logs as raw material. The current financial year is 30 April 2021. 1. Materials: The business total annual demand is 100 000 logs of wood Vryheid Kwazulu-Natal. A log of wood is purchased for costs R3,00. Nekoachemo Ltd raise a loan at a 12% interest rate per annum to finance logs inventory. The variable costs are R25 to place an order of logs and that the other variable annual holding costs (excluding interest) is R1,10 for each log of wood. 2. Labour: The Nekoachemo Ltd hired five employees. Each of the four employees worked a total of 20 overtime hours. The one employee worked a total of 25 hours. Employees work 52 weeks in a financial year of which 45 weeks are normal working weeks. The company's normal hours in a week are 48 hours per employee. The normal rate is R50 per hour per employee. The overtime rate is two and half the normal rate. Employer's total contributions are as follows: Pension fund is 9% of basic salary. UIF is 1% of gross salary. Annual total Medical aid (for all employees) is R42 743,75 3. Overheads: The manufacturing overheads totalled R2 680 000 for the year. The total annual manufacturing overheads are eventually allocated to production divisions namely the Apple and Banana Divisions. The manufacturing overheads are expected to be allocated to the divisions as follows: Servicing Division Division Apple 30% Division Banana 25% General factory Division 10% 35% The general factory division represent space utilisation and the utilisation by divisions is as follows: Servicing Division Division Apple 50% Division Banana 25% 25%

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