Manufacturing

Introduction

Good Morning Learners we will be doing Manufacturing as of today

Manufacturing - any industry that makes products from raw materials by the use of manual labour or machinery and that is usually carried out systematically with a division of labour In a more limited sense, manufacturing denotes the fabrication or assembly of components into finished products on a fairly large scale.

See below video for more explanation of Manufacturing

 

Task

Outcomes:

  • Identify and explain concepts involved in manufacturing
  • Be able to prepare notes used for production cost statement
  • Be able to prepare production cost statement
  • Calculate break even point

Question 1

Sihle Sangweni owns two separate factories that manufacture products according to orders received. There is no work-in-progress stock. The year-end is 28 February.

1.1 Indicate whether the following statements are TRUE or FALSE. Write only 'true' or 'false' next to the question numbers (1.1.1 to 1.1.3) in the ANSWER BOOK.

1.1.1 Wages of factory cleaners is a direct labour cost.

1.1.2 Delivery costs of finished goods to retailers are a selling and distribution cost.

1.1.3 Depreciation on office equipment is an administration cost.

1.2 DESKS FACTORY

REQUIRED:

1.2.1 Complete the Factory Overhead Cost Note.

 1.2.2 Calculate the total cost of production of finished goods.

 1.2.3 Sihle wants to produce an additional 1 500 desks, while maintaining the selling price and costs. Calculate the additional profit he can expect.

INFORMATION: A.

DESKS FACTORY

Extract of pre-adjustment amounts on 28 February 2019 R

  • Indirect labour 296 500
  • Depreciation of factory plant 166 000
  • Advertising 24 500
  • Water and electricity 248 000
  • Rent expense 345 600
  • Insurance allocated to sales department 12 600 Factory sundry expenses 107 700

 

Adjustments to factory overheads for desks:

  •  Water and electricity for February 2019, R18 000, must be taken into account. 80% is allocated to the factory. The balance is an administration cost.
  •  Rent must be allocated according to floor area: Factory: 810 m 2 Office: 180 m 2 Sales department: 90 m 2
  •  75% of insurance must be allocated to the factory. The balance applies to the sales department.

Use the below links to assist you with the completion of this task.

 

Process

Steps to follow to complete the task.

  1. Plan what needs to be done.
  2. Make time
  3. Get help if you are stuck for example you can use videos for more clarity.
  4. Answer all questions for marks
  5. Send your task on E-mail on due date and time.

see below links for documents that are need in completing the tasks.

https://mycourses.co.za/wp-content/uploads/2020/08/Accounting-Nov-2019-Eng.pdf

 

Evaluation

Rubric 

 

Question  Section Marks Time
1.1 Indicate whether the following statements are TRUE or FALSE 3 5 minutes
1.2  Complete the Factory Overhead Cost Note 8 15 minutes
1.3 Calculate the total cost of production of finished goods.  10 minutes
1.4      Sihle wants to produce an additional 1 500 desks, while maintaining the selling price and costs. Calculate the additional profit he can expect.  8 minutes

 

Conclusion

In this chapter we are going to be able to explain the manufacturing concepts be able to calculate productions cost statement and distinguish whether the business is making a profit or a loss by calculating break even point.

You are expected to do your practice in your calculations in order to be perfect and have a better understanding of the topic more.

Go back to your videos given under resources for the lesson to be done in the future study next week.

Credits
Teacher Page

This topic is very simple easy and interesting to complete, please read through all your notes and make the use of the videos provided to you. 

All the best.

if you need anything from me you can contact me via whatsapp my number is 0624842495.

Cebokazi Blayi

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