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Question 13.5 Lavita Limited was incorporated on 1 January 20X5. The resident accountant has provided you with the following information regarding its manufacturing facility: The

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Question 13.5 Lavita Limited was incorporated on 1 January 20X5. The resident accountant has provided you with the following information regarding its manufacturing facility: The factory is managed by a supervisor, earning an annual salary of C144 000. The factory involves a single plant, which was purchased in 20X4 for C72 000, but which was first available for use on 2 January 20X5. Depreciation is calculated using the straight-line method over the plant's expected useful life of 15 years to a nil residual value. There are no other fixed manufacturing costs other than those referred to above. . Information relevant to the first period (8 months) of operation was as follows: Budgeted (units) Actual (units) Sales 27 000 18 000 Production 36 000 21 600 Required: In respect of Lavita Limited's year ended 31 August 20X5: a) Calculate the application rate to be used when allocating fixed manufacturing costs to inventory at year end. b) Calculate the fixed manufacturing costs included in the inventory closing balance. c) Calculate the total amount of fixed manufacturing costs expensed during the period

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