Question $1[25$ Marks$]$

You are the cost accountant of Chester Field Pty Ltd$,$ and your company manufactures

a standard type of steel product $($product code: RD$4)$ used to create cans for beverage

storage. Your company has five steel smelting machines operating in the factory at

$80\%$ capacity. At $100\%$ capacity, these smelting machines can produce a total of $500$

tons of the finished product per month. Therefore, on average, $400(500*80\%)$ tons of

RD$4$s are manufactured on a weekly basis, assuming $48$ operational weeks in a year.

All amounts are exclusive of VAT where applicable. Assume that all RD$4$s are sold

within the same month during which they are manufactured.

Period Costs $($R$)$ Product Costs $($R$)$

Marketing,

distribution

or selling

cost

Adminis

trative

cost

Direct

materials

Direct

Labour

Manufact

uring

overhead

s

Iron ore purchased per

week R$30000$

Wages of machine

operators R$800$ per

operator per week$\mathrm{.}30$

machine operators will

be on duty in the factory

at any time

Monthly salary of the

factory supervisor,

R$10000$

Depreciation on steel

smelting machine, R$200$

$000$ per machine per

annum

Depreciation on office

equipment, R$44000$ per

annum

Depreciation on delivery

vehicle, R$12600$ per

annum

CEO$$s travelling costs

R$4800$ per month

Rates and taxes amount

to R $12000$ per month

and must be apportioned

in relation to floor space

$($factory takes $70\%$ of the

total floor space of the

entire premises

Advertising and

distribution costs R $1000$

per week

Indirect materials used

in production R$20$ per

ton of RD$4$

manufactured

Wages of the factory

general cleaner R $2500$

per week

Fees paid to the security

company for the security

guard at entrance to the

administrative building,

R$1000$ per month

Fees paid to the security

company for the security

guard at entrance to the

factory building, R$1000$

per month

Monthly insurance

premium R $4100($R $2$

$800$ of which relates to

the factory$)$

Import tariffs and

customs duty paid on

steel imported from

abroad R $1000$ per $100$

tons imported

Telephone, stationery

and general office

expenses R $3000$ per

month

Railage and carriage on

sales R $2400$ per

consignment of $450$ tons

sold

TOTALS

Required

$1.$ Complete the above table by using the monthly cost figures. $(24$ Marks$)$

Round off all calculations to the nearest Rand

$2.$ Calculate the total monthly costs incurred by the business. $(1$ mark$)$

Assume a VAT rate of $15\%$ where applicable. $($Show all your calculations$)$

$8$