STAR WHEELS MANUFACTURERS You are provided with information relating to Star Wheels Manufacturers for the year ended 31 December 2015 - NSC Accounting - Question 2 - 2016 - Paper 1

For the Factory Overhead Cost, we need to consider the various components:

1. Indirect Materials:

   • Indirect factory materials = R15,100
   • Total indirect materials:

   $ext{Indirect Materials} = R15,100$

2. Salaries:

   • Salary for foreman: R156,000

3. Utilities:

   • Electricity and water:

   $ext{Electricity and water} = R40,000$

4. Rent Expense:

   • Calculation of Total Rent:

   ext{Rent Expense} = R115,200 imes rac{200}{500} = R46,080

5. Insurance:

   • Annual insurance:

   $ext{Insurance} = R27,720$

6. Depreciation:

   • Total on factory plant and machinery: R641,200

Total Factory Overhead Cost:

$ext{Total Factory Overhead} = R15,100 + R156,000 + R40,000 + R46,080 + R27,720 + R641,200 = R926,100$

To prepare the Production Cost Statement, we need to aggregate the direct labour cost and factory overhead costs calculated above:

Production Cost Statement

• Direct Materials Used: (not provided in the question, assumed available)
• Direct Labour Cost: R1,311,600
• Factory Overhead Costs: R926,100

Total Production Cost:

• Calculation:

$ext{Total Production Cost} = ext{Direct Materials} + ext{Direct Labour Cost} + ext{Factory Overhead}$

The calculated Total Production Cost should include the direct materials once that information is available.