QUESTION 13

1. Use the information below to answer the following questions. Dans Fencing constructs paling fences. During last month, the fencing division erected 4,000 metres of fencing. The costs incurred by the division were as follows: Palings $4,000 Posts $5,000 Nails (no usage records) $500 Cement (no usage records) $500 Wear and tear on equip. $1,000 Refer to the table above. The cost per metre of fencing is:

   		$2.50
   		$2.38
   		$2.75
   		$2.25

1 points

QUESTION 14

1. In determining the cost of inventory, department Ms indirect costs are allocated using machine hours as the cost driver.

   If department Ms indirect costs total $850 000 and it expects to use 52 000 machine hours for the period, the indirect cost rate for the department is:

   		Unable to be determined from the information given
   		$0.061 per machine hour
   		$16.346 per machine hour
   		$16.346 per direct labour hour

1 points

QUESTION 15

1. Use information below to answer the following questions. Osborne Ltd manufactures a wide range of leather suitcases. The following costs are expected to be incurred by the company during May: Indirect labour cost $28,000 Direct labour time 10,000 hours Depreciation on equipment $20,000 Rent and Rates $13,000 Direct labour costs $98,000 Heating, lighting and power $ 4,000 Machine time 8,000 hours Indirect materials $ 5,000 Consumables $ 2,000 Direct materials used $50,000 Production estimate 1,000 suitcases Refer to the table above. The total product cost of producing the suitcases for May is:

   		$187,000.
   		$207,000.
   		$220,000.
   		$218,000.

1 points

QUESTION 16

1. The classification of a cost as either direct or indirect depends primarily on:

   		the computer tracing system within the organisation.
   		the knowledge of the accountant.
   		the definition of the cost object.
   		the type of business.