Question
TwoSet Cello is a business that sells cellos and uses a consistent mark-up of 40% on selling price. On 4 January 2021, TwoSet Cello ordered
TwoSet Cello is a business that sells cellos and uses a consistent mark-up of 40% on selling price. On 4 January 2021, TwoSet Cello ordered 17 cellos on credit from a supplier in Bulgaria. The purchase price (after deducting a trade discount of 5%) was R8 000 per cello. The order arrived at TwoSet Cello on 21 January 2021. Delivery costs to the shop for the full order amounted to R23 000, and import duties amounted to R313 per cello. On 22 January 2021, one staff member took eight hours to pack the cellos in the store. The staff members were each paid R48 per hour. In January 2021, TwoSet Cello spent a total of R7 000 advertising these cellos.
By 31 January, 90% of them had been sold. Delivery costs relating to sales made to customers amounted to R3 000 in total. On 31 January 2021, a physical inventory account revealed that 1 cello had been lost.
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Required: Round off all answers to the nearest Rand 1. Calculate the cost of each cello in the table provided below. Note that each amount included in the cost must be an amount per cello. If you beli included, then indicate "O". (If you do not include zero, you will lose marks). Costs incurred Cost per cello Purchase price Delivery costs to the shop Import duties Wages of packing staff Advertising costs Delivery costs to the customer Total cost per cello 2. Calculate the following amounts that would appear in the Income Statement of TwoSet Cello for the month ended January 2021. Sales Income Cost of Sales Expense Gross Profit
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