Answer Happy

Question 6 [10 marks; 18 minutes] Rufura is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Beginning Ending Balance Balance Raw materials R16,000 R31,000 Work in process 24,800 7,500 Finished goods 50,000 65,000 The following transactions were recorded for the year: Raw materials were purchased, R210,000. • Raw materials were requisitioned for use in production, R195,000 (R160,000 direct and R35,000 indirect). • The following employee costs were incurred: direct labour, R270,000; indirect labour, R88,000; and administrative salaries, R160,000. • Selling costs, R147,000. • Factory utility costs, R12,400. • Depreciation for the year was R127,000 of which R120,000 is related to factory operations and R7,000 is related to selling and administrative activities. • The company applies overhead to jobs using a predetermined overhead rate based on labour-hours. At the beginning of the year, the company estimated that it would work 21,000 labour-hours and incur R189,000 in manufacturing overhead costs. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 26,000 labour-hours. • Sales for the year totaled to R1,253,000.