Please answer all the following questions, showing working out and explanations

This test came from a fbs 222 2023 semester test 1 paper. Please give the correct answers

QUESTION PLEASE USE SIDE 1 OF THE OPTICAL MARKING READING SHEET FOR THIS QUESTION 1 20 MARKS Multiple choice (10 questions 2 marks each = 20 marks) 1. Which one of the following is a period cost? a) Factory insurance b) Direct labour c) Factory quality control d) Salary of the CEOalary The following information applies to question 2 below: Thankode Cement is a concrete and cement manufacturing company based in Pretoria North. The following information is applicable: Manufacturing departments Service departments Crushing Grinding Quality control | Administration Overheads costs R1 630 000 R846 000 R1 600 000 R4 300 000 Machine hours 7 000 1 000 2 000 2 000 Square meters 5 000 15 000 1 000 1 500 Quality control costs are allocated based on machine hours and Administration costs are allocated based on square meters 2. What are the costs allocated to Crushing and Grinding by the support departments if the company uses the direct method of assigning costs? a) Quality control: R1 580 600 to Crushing and R225 800 to Grinding , Administration: R1 023 810 to Crushing and R3 071 429 to Grinding b) Quality control: R800 000 to Crushing and R800 000 to Grinding , Administration: R1 720 000 to Crushing and R2 580 000 to Grinding c) Quality control: R225 800 to Crushing and R1 580 600 to Grinding, Administration: R3 071 429 to Crushing and R1 023 810 to Grinding d) Quality control: R1400 000 to Crushing and R200 000 to Grinding , Administration: R1 075 000 to Crushing and R3 225 000 to Grinding Downloaded by Aneeka Gounden (aneeka.gounden@gmail.com)3. Materials in the raw materials account do not become direct materials: a) Until they are withdrawn from inventory for use in production. b) Until the finished product is sold. c) Until they are purchased from a vendor. d) None of these are correct. 4. Which one of the following is an indirect cost? a) The cost of bottles in a body lotion factory. b) The cost of mixing labour in the cement factory. 2 2 The cost of re-striping the parking lot at a shower gel factory. d) The cost of wool in a jacket factory. 5. A normal job-order costing system is a system that uses: a) Actual costs for direct materials and estimated costs for direct labour and overhead b) Estimated costs for direct materials, direct labour and overheads c) Actual costs for direct materials and direct labour and estimated costs for overheads d) Actual costs for direct materials and overheads, estimated costs for direct labour 6. Setting objectives and identifying methods to achieve these objectives is called: a) Planning b) Decision making c) Controlling d) Performance evaluation 7. The process of choosing among competing alternatives is called: a) Planning b) Decision making c) Controlling d) Performance evaluation jounden (aneeka.gounden@gmail.com)8. The primary objective of managerial accounting is: a) To provide shareholders and potential investors with useful information for decision making b) To provide banks and other creditors with information useful in making credit decisions. c) To provide management with information useful for planning and control of operations. d) To provide the Internal Revenue Service with information about taxable income 9. Hoperite Lid applies overhead based on direct labour hours. At the beginning of the year, Hoperite Lid estimated overhead to be R620 000, machine hours to be 180 000, and direct labour hours to be 40 000. During February, Hoperite Lid worked 4 200 direct labour hours and 8 000 machine hours. If the actual overhead for February is R64 700, what is the overhead variance and is it overapplied or underapplied?: 20060 a) R400 under-applied applied = 15,5 x 4 200 b) R200 over-applied = 65 100 c) R1 000 under-applied 65 1 d) R400 over-applied 10. An opportunity cost is: a) The difference between sales revenue and cost of goods sold. b) The cost to market, distribute and service a product or service. c) The total product cost of goods completed during the current period and transferred to finished goods inventory. d) The benefit given up when one alternative is chosen over another.QUESTION 2 (5 MARKS) Cornelius Limited is a family business that supplies auto parts to the public, and they have a financial accountant assisting them with their books. Recently, the company decided to venture into manufacturing of tables. They are sceptical about the risk of failure. They want to be responsible for personnel, accounting, management accounting, sales and production, and administering all aspects of the business. Hence, the company seeks your professional advice as a student of Management Accounting, on how to plan and control the business. Based on the above information, you are therefore required to do the following: Required: Marks a) Provide two comparison between financial accounting and management accounting (2) b ) Briefly explain the planning process that this business needs to follow (3) when venturing into manufacturing. Total [5] QUESTION 3 (5 MARKS) Show all the calculations. Beke-Le-Beke Lid manufactures desks and chairs and has the following information available for the period 31 March 2023 The following is needed to manufacture 400 desks; wood costs R20 000; it takes 45 minutes to manufacture one desk, and R45.76-7DL is payable per hour for labour cost. Factory rent was R5 000, factory utilities R1 500, factory cleaners salary R1 000, materials handling cost R500 to produce 400 desks. Selling and administrative cost was R130 000; monthly rental of R5 000 payable for storing the materials for producing desks in Pretoria East Storage Limited. The selling price per unit for a desk is R550. Marks Required: Discit maltrails a) Calculate the cost per unit for a desk Man acidaids (5) Total [5] 4 Downloaded by Aneeka Gounden (aneeka.gounden@gmail.com)QUESTION 4 (10 MARKS) Dark Equip Limited is a manufacturing company that produces custom-made machines at customers' request. The following figures were extracted from Dark Equip Lid On 30 June 2023 The work in process consisted of two unfinished jobs Job 410 Job 412 Work in process R45 500 R37 500 In the past, the manufacturing overheads were recovered on the basis of direct labour costs, but this proved to be problematic because of the wide fluctuations in labour costs on similar jobs. It was then decided that labour hours should be used as a basis during the next six-month period ending 31 December 2023. The budgeted manufacturing overheads for this period would be R100 000, based on 40 000 direct labour hours. During July, two new jobs were started: Job 701 and Job 702. Costs incurred and labour hours worked during this period were as shown below: Details Job 410 Job 412 Job 701 Job 702 Direct material cost R1 500 R2 500 R 6 400 R8 600 Direct labour cost R2 500 R8 000 R10 000 R9 000 Direct labour hours 600 1 800 2 600 2 400 Number of Machines 5 3 5 2 Actual manufacturing overheads incurred during July 2023 were R20 000: 5 actual 20ooo appled 737, s Downloaded by Aneeka Gounden (aneeka.gounden@gmail.com)ONEation All finished goods were sold for R147 000. Jobs 701 and 702 were still incomplete at the end of July. Required: Marks a) Calculate the predetermined overhead rate for the six-month period (2) ending 31 December 2023. b) Calculate the over/under-applied manufacturing overhead and (4) indicate how it should be treated on the face of income statement. c) Calculate the total cost for jobs 410 and 412 separately. (4) Total [10] TOTAL 40 MARKS END OF PAPER