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4 marksLabour Costing and Remuneration

CAPE Accounting Unit 2 · 2013 · Paper 2 · Question 1(b)(i)

Sue Lalah works in Production Department P1 assembling products. She earns $60 per hour for regular time and time-and-a-half for hours worked beyond 45 hours per week.

In the first week, Sue worked 45 hours but was idle for 3 hours due to machine breakdowns, with no overtime. Allocate Sue's wages for the week between direct labour cost and manufacturing overhead cost.

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Other parts of this question

  1. 1(a)(i)Using the provided answer sheet, prepare a schedule to allocate service department costs to production departments using the step-down method.[13 marks]
  2. 1(a)(ii)Compute predetermined overhead rates for Production Department P1 and Production Department P2.[2 marks]
  3. 1(b)(ii)In the second week, Sue worked 60 hours with no idle time. Allocate Sue's wages for the week between direct labour cost and manufacturing overhead cost.[5 marks]
  4. 1(b)(iii)Identify two other methods of remuneration/payment that Tell Company could use for its employees.[2 marks]
  5. 1(c)(i)Use a diagram and an example to explain fixed cost.[3 marks]
  6. 1(c)(ii)Use a diagram and an example to explain variable cost.[3 marks]
  7. 1(c)(iii)Use a diagram and an example to explain stepped-fixed cost.[3 marks]

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