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6 marksCost Elements, Classification and Cost Curves

CAPE Accounting Unit 2 · 2006 · Paper 2 · Question 1(b)(i)

A customer from Mahogany Land offers a one-time order for 200 tables at a flat fee of 1 200 per dinette set, picking up at the factory with no sales commissions. Usual selling price is 1 800.

Assuming fixed costs remain constant between 800 and 1300 dinette sets, determine whether the order should be accepted. Show supporting workings.

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Other parts of this question

  1. 1(a)(i)Compute the total variable costs incurred for the current period.[4 marks]
  2. 1(a)(ii)Compute the total fixed costs incurred for the current period.[3 marks]
  3. 1(a)(iii)Compute the total product costs incurred for the current period.[4 marks]
  4. 1(a)(iv)Compute direct materials used for the current period.[3 marks]
  5. 1(a)(v)Compute total manufacturing overhead for the current period.[3 marks]
  6. 1(a)(vi)Compute cost of goods manufactured for the current period.[5 marks]
  7. 1(a)(vii)Compute cost of goods sold for the current period.[4 marks]
  8. 1(b)(ii)List THREE qualitative factors that should be considered by a company when evaluating whether or not to accept a special order.[3 marks]

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