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17 marksOverheads and Manufacturing Accounts

CAPE Accounting Unit 2 · 2017 · Paper 2 · Question 1(a)

Orchid Enterprise provided trial balance figures and additional adjustments for the year ended 31 December 2016, including direct costs, overhead allocations (rent and utilities apportioned based on occupancy: 70% factory, remainder office), inventory counts, accruals, prepayments, salaries allocation, and depreciation.

Prepare a schedule of the cost of goods manufactured for the year ending 31 December 2016.

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Other parts of this question

  1. 1(b)(i)Identify the unit costs which will be relevant to the decision to be made by Orchid Enterprise and calculate the total unit cost.[5 marks]
  2. 1(b)(ii)Should the company accept the special order? Justify your answer.[3 marks]
  3. 1(c)(i)Compute the value of the closing inventory of raw materials for March 2016 using the First-in, first-out (FIFO) method.[3 marks]
  4. 1(c)(ii)Compute the value of the closing inventory of raw materials for March 2016 using the Average cost method.[3 marks]
  5. 1(d)List TWO principles of material control and give an example of EACH principle.[4 marks]

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