QUESTION 5

5.1 INFORMATION: Rockwell Limited sells a single product at a selling price of R120 per unit. The estimated sales volume for the last four months of 2022 are as follows:

Units

September 12 000

October 14 000

November 18 000

December 16 000

1. Managements policy is to maintain finished goods inventory every month at 50% of the following months budgeted sales. The finished goods inventory on 30 September was 7 000 units. 2. To make one unit of finished product, 5kg of materials are required. The cost per kilogram of material is R80. 3. Each unit requires 2 direct labour hours. The labour rate is R110 per hour. 4. Production overheads amount to R100 per unit.

5.1.1 Determine the production schedule for October and November. (5 marks)

5.1.2 Determine the total production cost for October and November. (5 marks)