Q 2 2 Differentiate Clearly Between A Product Cost And A Period Cost Including Some 5 Examples Hint Do Not Only Gi 1 (456.29 KiB) Viewed 12 times
Q.2.2 Differentiate clearly between a product cost and a period cost, including some (5) examples. (Hint: Do not only give definition but clearly differentiate). The following information applies to Q.2.3 - Q.2.9 Green (Pty) Ltd manufactures a standard type of tricycle. The following are the budgeted costs: Unless stated otherwise, all amounts exclude VAT. Raw materials used R950 per unit produced Direct labour R300 per unit produced Factory foreman's wages R4 800 per month Rental of factory R7 200 per month Rates and taxes R1 550 per month Sales representatives' commission R200 per unit sold Advertising costs R15 500 per month Variable indirect materials used R70 per unit produced Insurance on factory R990 per month Quality controller R350 per month The business intends to sell the manufactured tricycles at R3 000 each plus VAT @ 15%.
Required: Q.2.3 Calculate the variable costs per unit produced. (5) Q.2.4 Calculate the fixed costs per month. (7) Q.2.5 Calculate the contribution margin per unit sold. (2) Show your workings. Q.2.6 Calculate the monthly break-even point in units. (3) Show your workings. Q.2.7 Calculate the monthly break-even point in sales revenue. (2) Show the formula and your workings. Round to the nearest Rand Q.2.8 How many units needs to be sold in order to make a profit of at least R100 000 per (4) month. Q.2.9 Identify two period costs that Green Pty Ltd incurs. (2)
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