QUESTION 1 (35 marks) Intathakusa (Pty) Ltd was founded by Zenzo and Ria, who are accomplished...

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QUESTION 1 (35 marks) Intathakusa (Pty) Ltd was founded by Zenzo and Ria, who are accomplished artisans and the only directors of the company. The company manufactures wooden tables. The company rents factory and office space in Pieters, Ladysmith. The materials required for manufacturing one table are as follows: African Blackwood (wood): 8 slatted pieces African Walnut (wood): 4 square pieces 2 packets of brass screws .1 litre of varnish Sandpaper Glue In the financial year ending 31 March 2021, Intathakusa (Pty) Ltd purchased African Blackwood at R96 per slatted piece; African Walnut at R103 per square piece; brass screws at R35 per packet and vanish at R69 per litre. These prices increased by 5,2% at the beginning of the financial year ending 31 March 2022 and remained fixed throughout the year. For the financial year ended 31 March 2022, the direct labour rate per hour is R35. The production overhead costs are apportioned to production at a plant-wide rate of R45 per direct labour hour. Actual production overheads and actual direct labour hours for the financial year which ended on 31 March 2022 were R623 200 and 14 100 hours, respectively. Intathakusa (Pty) Ltd uses a FIFO cost formula. During the year 720 tables were sold. Inventories at the beginning and end of the financial year under review were as follows: Opening inventory 1 April 2021 1315 pieces Closing inventory 31 March 2022 1216 pieces 668 pieces African Blackwood...... African Walnut.. 550 pieces Brass screws.... 290 packets 224 packets Vanish.. 68 litres Finished goods.. Work-in-process. R541230 90 litres 38 tables R315 209 12:43 PM AE MAC1501_20... 5 LTE 59% Required: 1.1 Which basis does Intathakusa (Pty) Ltd apply for measuring wood tables input costs? Motivate your answer. 1.2 Explain why the glue and sandpaper used in the manufacturing of wood tables are not classified as direct materials. 1.3 Calculate the number of units (i.e., tables) completed during the financial year ended on 31 March 2022. 1.4 Calculate, for each of the following, the quantities of purchases of direct materials for the year ended 31 March 2022. 1.4.1 African Blackwood (wood) 1.4.2 African Walnut (wood) 1.4.3 Brass screws 1.4.4 Vanish 1.5 Calculate, for each of the following, the cost of direct materials issued to [10] production for the year ended 31 March 2022: (Round off unit prices to the nearest R1 where applicable) 1.5.1 African Blackwood (wood) 1.5.2 African Walnut (wood) 1.5.3 Brass screws 1.5.4 Vanish 1.6 Calculate the over- or under-absorption of production overheads during the financial year that ended on 31 March 2022. 1.7 Prepare a general journal entry to account for the over- or under-absorption of production overheads during the financial year that ended on 31 March 2022. 1.8 Prepare a Statement of Cost of Goods Manufactured for the year ended 31 March 2022. 1.9 Identify two internal and two external stakeholders of Intathakusa (Pty) Ltd. (4) (2%) (2%) (2%) (2%) QUESTION 1 (35 marks) Intathakusa (Pty) Ltd was founded by Zenzo and Ria, who are accomplished artisans and the only directors of the company. The company manufactures wooden tables. The company rents factory and office space in Pieters, Ladysmith. The materials required for manufacturing one table are as follows: African Blackwood (wood): 8 slatted pieces African Walnut (wood): 4 square pieces 2 packets of brass screws .1 litre of varnish Sandpaper Glue In the financial year ending 31 March 2021, Intathakusa (Pty) Ltd purchased African Blackwood at R96 per slatted piece; African Walnut at R103 per square piece; brass screws at R35 per packet and vanish at R69 per litre. These prices increased by 5,2% at the beginning of the financial year ending 31 March 2022 and remained fixed throughout the year. For the financial year ended 31 March 2022, the direct labour rate per hour is R35. The production overhead costs are apportioned to production at a plant-wide rate of R45 per direct labour hour. Actual production overheads and actual direct labour hours for the financial year which ended on 31 March 2022 were R623 200 and 14 100 hours, respectively. Intathakusa (Pty) Ltd uses a FIFO cost formula. During the year 720 tables were sold. Inventories at the beginning and end of the financial year under review were as follows: Opening inventory 1 April 2021 1315 pieces Closing inventory 31 March 2022 1216 pieces 668 pieces African Blackwood...... African Walnut.. 550 pieces Brass screws.... 290 packets 224 packets Vanish.. 68 litres Finished goods.. Work-in-process. R541230 90 litres 38 tables R315 209 12:43 PM AE MAC1501_20... 5 LTE 59% Required: 1.1 Which basis does Intathakusa (Pty) Ltd apply for measuring wood tables input costs? Motivate your answer. 1.2 Explain why the glue and sandpaper used in the manufacturing of wood tables are not classified as direct materials. 1.3 Calculate the number of units (i.e., tables) completed during the financial year ended on 31 March 2022. 1.4 Calculate, for each of the following, the quantities of purchases of direct materials for the year ended 31 March 2022. 1.4.1 African Blackwood (wood) 1.4.2 African Walnut (wood) 1.4.3 Brass screws 1.4.4 Vanish 1.5 Calculate, for each of the following, the cost of direct materials issued to [10] production for the year ended 31 March 2022: (Round off unit prices to the nearest R1 where applicable) 1.5.1 African Blackwood (wood) 1.5.2 African Walnut (wood) 1.5.3 Brass screws 1.5.4 Vanish 1.6 Calculate the over- or under-absorption of production overheads during the financial year that ended on 31 March 2022. 1.7 Prepare a general journal entry to account for the over- or under-absorption of production overheads during the financial year that ended on 31 March 2022. 1.8 Prepare a Statement of Cost of Goods Manufactured for the year ended 31 March 2022. 1.9 Identify two internal and two external stakeholders of Intathakusa (Pty) Ltd. (4) (2%) (2%) (2%) (2%)