Question 4 Accounting

The following relates to Dress outfitters: The business manufactures clothing products. The information relates to school dresses which is one of the products they manufacture. Dresses are manufactured according to orders received and there is no work-in-progress. The financial year ended on 30 April 2022. Additional information: Raw Materials Fabric is issued to the factory using the weighted-average method. Production and sales: Manufacturing one dress requires 1,6 metres of fabric 17800 dresses were produced and sold during the financial year at R75 per dress. "Normal time comprises a 5-day week of 8 hours per day. The factory operates for 46 weeks each year Factory overhead costs The followina costs were extracted from the records on 30 April 2022 Factory rent is split according to floor space occupied. The dress-making section occupies 320m2 of the total factory space of 1280m2.15% of the total water and electricity account must be allocated to the dressmaking section. Insurance on factory equipment was paid up to 30 June 2021. Dress-making equipment comprises 1/3 of the total factory equipment. Only one of the six cleaners, Susan, was allocated to the dressmaking section. Susan earns 10% less than the other five cleaners. Total variable costs amounted to R1094700 (R61,50 per unit) Fixed costs, comprising factory overhead costs and administration costs, totalled R229 500 Required 4.1 Complete the Factory Overhead Cost Note for the school dresses. (15 Marks) 4.2 Calculate the total cost of production of school dresses produced (5 Marks) 4.3 Calculate the cost of this wastage to the business (Show wastage in Meters and Rands) (5 Marks) 4.4 You have identified a concern about the direct labour cost for the school dresses, prepare an explanation with supporting. Provide possible causes and solutions to this problem. (8 Marks) 4.5 Calculate the number of units required to break even, and comment briefly on the current volumes of the business (5 Marks) 4.6 Calculate the extra profit that would be earned if an additional 500 dresses are made and sold. Assume that all costs are unchanged. (2 Marks) The following relates to Dress outfitters: The business manufactures clothing products. The information relates to school dresses which is one of the products they manufacture. Dresses are manufactured according to orders received and there is no work-in-progress. The financial year ended on 30 April 2022. Additional information: Raw Materials Fabric is issued to the factory using the weighted-average method. Production and sales: Manufacturing one dress requires 1,6 metres of fabric 17800 dresses were produced and sold during the financial year at R75 per dress. "Normal time comprises a 5-day week of 8 hours per day. The factory operates for 46 weeks each year Factory overhead costs The followina costs were extracted from the records on 30 April 2022 Factory rent is split according to floor space occupied. The dress-making section occupies 320m2 of the total factory space of 1280m2.15% of the total water and electricity account must be allocated to the dressmaking section. Insurance on factory equipment was paid up to 30 June 2021. Dress-making equipment comprises 1/3 of the total factory equipment. Only one of the six cleaners, Susan, was allocated to the dressmaking section. Susan earns 10% less than the other five cleaners. Total variable costs amounted to R1094700 (R61,50 per unit) Fixed costs, comprising factory overhead costs and administration costs, totalled R229 500 Required 4.1 Complete the Factory Overhead Cost Note for the school dresses. (15 Marks) 4.2 Calculate the total cost of production of school dresses produced (5 Marks) 4.3 Calculate the cost of this wastage to the business (Show wastage in Meters and Rands) (5 Marks) 4.4 You have identified a concern about the direct labour cost for the school dresses, prepare an explanation with supporting. Provide possible causes and solutions to this problem. (8 Marks) 4.5 Calculate the number of units required to break even, and comment briefly on the current volumes of the business (5 Marks) 4.6 Calculate the extra profit that would be earned if an additional 500 dresses are made and sold. Assume that all costs are unchanged. (2 Marks)