3.1 Choose the correct word(s) from those given in brackets - NSC Accounting - Question 3 - 2017 - Paper 1
Question 3
3.1 Choose the correct word(s) from those given in brackets. Write only the word(s) next to the question number (3.1.1–3.1.4) in the ANSWER BOOK.
3.1.1 The wages of... show full transcript
Worked Solution & Example Answer:3.1 Choose the correct word(s) from those given in brackets - NSC Accounting - Question 3 - 2017 - Paper 1
Step 1
3.1.1 The wages of factory cleaners are classified as (direct labour/ factory overhead) cost.
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Answer
The wages of factory cleaners are classified as direct labour cost.
Step 2
3.1.2 Factory rent is a (fixed/ variable) cost.
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Answer
Factory rent is a fixed cost.
Step 3
3.1.3 Packing materials used are regarded as (an/selling and distribution/ administration) cost.
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Packing materials used are regarded as selling and distribution cost.
Step 4
3.1.4 Break-even point refers to the (minimum/ maximum) number of units that must be produced and sold to cover all costs.
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Break-even point refers to the minimum number of units that must be produced and sold to cover all costs.
Step 5
3.2.1 Prepare the Factory Overhead Cost Note.
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To prepare the Factory Overhead Cost Note, first gather relevant cost information such as indirect factory materials, salaries and wages, rent expense, insurance, telephone costs, and sundry expenses. Align these costs under the respective categories to accurately calculate total factory overhead.
Step 6
3.2.2 Complete the Production Cost Statement for the year ended 28 February 2017.
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The production cost statement should include direct materials, direct labour, factory overhead, and beginning and ending work-in-process inventory to derive the cost of production of finished goods.
Step 7
3.2.3 Provide TWO points they should consider before deciding.
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Exchange rate fluctuations can significantly impact the cost of imported materials, making it crucial to monitor currency trends.
Import duties and tariffs may increase overall expenses, potentially negating any cost savings from purchasing raw materials overseas.
