Question
The following operating costs were extracted from the books of Paper Producers Ltd for the month of February 2020: Details $ Purchases of direct raw
The following operating costs were extracted from the books of Paper Producers Ltd for
the month of February 2020:
| Details | $ |
| Purchases of direct raw materials | 8,000,000 |
| Stationery | 120,000 |
| Warehouse staff salaries | 2,200,000 |
| Direct expenses | 800,000 |
| Carriage outwards | 600,000 |
| Depreciation of factory machines | 500,000 |
| Electricity | 700,000 |
| Wages of truck drivers | 2,400,000 |
| Production supervisors salaries | 3,000,000 |
| Advertising expenses | 1,500,000 |
| Sales promotion costs | 1,000,000 |
| Training for sales staff | 650,000 |
| Wages of production workers | 4,000,000 |
| Insurance | 1,400,000 |
| Salesmen commission | 2,500,000 |
| Indirect raw materials | 1,600,000 |
| Indirect factory labour | 1,800,000 |
| Miscellaneous expenses | 1,300,000 |
| Depreciation of office machinery | 400,000 |
| Administrative salaries | 3,500,000 |
| Apportionments of the following charges are as indicated below: | Selling | Production | Administration | Distribution |
| Miscellaneous expenses | 30% | 25% | 20% | 25% |
| Insurance | 25% | 40% | 15% | 20% |
| Electricity | 15% | 45% | 30% | 10% |
The following operating costs were extracted from the books of Paper Producers Ltd for
the month of February 2020:
| Details | $ |
| Purchases of direct raw materials | 8,000,000 |
| Stationery | 120,000 |
| Warehouse staff salaries | 2,200,000 |
| Direct expenses | 800,000 |
| Carriage outwards | 600,000 |
| Depreciation of factory machines | 500,000 |
| Electricity | 700,000 |
| Wages of truck drivers | 2,400,000 |
| Production supervisors salaries | 3,000,000 |
| Advertising expenses | 1,500,000 |
| Sales promotion costs | 1,000,000 |
| Training for sales staff | 650,000 |
| Wages of production workers | 4,000,000 |
| Insurance | 1,400,000 |
| Salesmen commission | 2,500,000 |
| Indirect raw materials | 1,600,000 |
| Indirect factory labour | 1,800,000 |
| Miscellaneous expenses | 1,300,000 |
| Depreciation of office machinery | 400,000 |
| Administrative salaries | 3,500,000 |
| Apportionments of the following charges are as indicated below: | Selling | Production | Administration | Distribution |
| Miscellaneous expenses | 30% | 25% | 20% | 25% |
| Insurance | 25% | 40% | 15% | 20% |
| Electricity | 15% | 45% | 30% | 10% |
Notes:
- Calculate the Prime cost.
- Calculate the Factory overheads.
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
