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Unformatted text preview: ou discover that Freddy’s record keeping has been rather poor, but you are able to establish the
following: Production units (Pairs)
Sales units (Pairs)
Variable Manufacturing Overheads
Fixed Manufacturing Overheads
Variable Sales & Administration Expenses
Fixed Sales & Administration Expenses Year 1
? Year 2
? Year 3
? Upon further investigation, you discover that costs have remained constant over the three years (i.e. no inflation), that Direct
Material costs amount to R50 per pair and that Direct Labour costs are 20% higher per pair than Direct material costs.
Furthermore, the company assumes a FIFO flow as far as inventories are concerned. Other costs are: Manufacturing Overheads : Fixed + Variable
Sales and Admin. Expenses : Fixed + Variable Year 1
120 000 Year 2
123 000 Year 3
116 000 Required:
a. b. c. d. e. f. Using the High-Low technique, calculate the Variable Manufacturing Overheads, Fixed Manufacturing
Overheads, Variable Sales & Admin. Ex...
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This document was uploaded on 04/05/2014.
- Spring '14