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QUESTION 5 (20 MARKS 36 MINUTES Sandy's designs Cc is a small firm that makes outfits for customers tailored for their functions, in May 2021
QUESTION 5 (20 MARKS 36 MINUTES Sandy's designs Cc is a small firm that makes outfits for customers tailored for their functions, in May 2021 she has orders for a baby shower (BS) and a bridal party (BP). The details for Job BS are as follows: Direct materials: 12 units at N$124. Direct labour: -20 hours for department A at N$25 per hour 10 hours for department B at N$30 per hour 12 hours for department C at N$27.5 per hour The firm allocates manufacturing and N$3 000 in department C. rheads budgeted at N$2 500 in department A, N$2 000 in department B The firm expects a profit of 55% on the total cost. The details for Job (BP) are as follows: Direct materials: 10 units at N$108. Direct labour: - 16 hours for department A 10 hours for department B 14 hours for department C The labour hours are budgeted at 40, 25 and 30 in departments A, B and C respectively. The firm expects a profit of 40% on the total cost. MARKS REQUIRED Calculate the predetermined overhead allocation rate (CAR) for each department using 5.1 labour hours as a base for such allocation, 3 5.2 Calculate the cost of a bridal party (BP). 7 5.3 Calculate the Selling price of the bridal party (BP). 2.5 4 2.5 5.4 Calculate the cost of a baby shower (BS) 5.5 Calculate the Selling price of a baby shower (BS). If the number of outfits are the same for each type of function, which function should 5.6 Sally's choose to produce and why? TOTAL MARKS FOR QUESTION 5 1 20 5
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