X = R 100 000 + 5% (50 000 + 10% X) = R 100 000 + 0.05(50 000 + 0.01X) = R 100 000 + R 2 500 + 0.0005X X 0.0005X = R 102 500 – 0.995X = R 102 500 X = R 102 500/0.995 = R 103 015 Y = R 50 000 + 10% X = R 50 000 + 10% (R103 015) = R 60 301.50 Machining Finishing Assembly Initial cost R 400 000 R 200 000 R 100 000 R 30 905 R 25 754 R 36 055 Materials handling Inspection R 12 060 R 18 090 R 27 136 Total R 442 965 R 243 844 R 163 191 Revision exercises Chapter 11 Activity 2.2 Ex11.20 Product A B C D Output in units 120 100 80 120 Costs per unit R R R R Direct material 40 50 30 60 Direct labour 28 21 14 21 4 3 2 3 Machine hours (per unit) The four products are similar and are usually produced in production runs of 20 units and sold in batches of 10 units. The production overhead is currently absorbed by using a machine hour rate and the total of the production overhead for the period has been analysed as follows: Machine dept (rent, business rates, depreciation & supervisor R 10 430 Set-up costs R 5 250 Stores receiving R 3 600 Inspection / quality control R 2 100
X = R 100 000 + 5% (50 000 + 10% X) = R 100 000 + 0.05(50 000 + 0.01X) = R 100 000 + R 2 500 + 0.0005X X – 0.0005X = R 102 500 0.995X = R 102 500 X = R 102 500/0.995 = R 103 015 Y = R 50 000 + 10% X = R 50 000 + 10% (R103 015) = R 60 301.50 Machining Finishing Assembly Initial cost R 400 000 R 200 000 R 100 000 Materials handling R 30 905 R 25 754 R 36 055 Inspection R 12 060 R 18 090 R 27 136 Total R 442 965 R 243 844 R 163 191 Revision exercises Chapter 11 Activity 2.2 Ex11.20 Product A B C D Output in units 120 100 80 120 Costs per unit R R R R Direct material 40 50 30 60 Direct labour 28 21 14 21 Machine hours (per unit) 4 3 2 3 The four products are similar and are usually produced in production runs of 20 units and sold in batches of 10 units. The production overhead is currently absorbed by using a machine hour rate and the total of the production overhead for the period has been analysed as follows: Machine dept (rent, business rates, depreciation & supervisor R 10 430 Set-up costs R 5 250 Stores receiving R 3 600 Inspection / quality control R 2 100
reallocation_of_overheads_10feb_lecture.docx