You discover that freddys record keeping has been

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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 2000 2000 ? ? ? ? Year 2 2500 2300 ? ? ? ? Year 3 1500 1600 ? ? ? ? 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 1 340 000 120 000 Year 2 350 000 123 000 Year 3 330 000 116 000 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.

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