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3 marksService Sector Costing

CAPE Accounting Unit 2 · 2011 · Paper 2 · Question 1(b)(v)

Explain how direct and indirect costs are typically treated in an income statement of a service organization.

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Other parts of this question

  1. 1(a)(i)Prepare a schedule of cost of goods manufactured for the year ended December 31, 2010.[11 marks]
  2. 1(a)(ii)Calculate Horsford Company's cost of goods sold for the year ended December 31, 2010.[4 marks]
  3. 1(b)(i)Identify THREE major elements in the cost of a manufactured product.[3 marks]
  4. 1(b)(ii)Explain EACH of the following types of costs and give ONE example of EACH: a) Product cost b) Period cost c) Mixed cost[6 marks]
  5. 1(b)(iii)Distinguish between prime cost and conversion cost.[2 marks]
  6. 1(b)(iv)Identify ONE method that is used to separate mixed cost into its components.[1 mark]
  7. 1(c)(i)Compute the pre-determined manufacturing overhead rate for the year.[3 marks]
  8. 1(c)(ii)Calculate the amount of manufacturing overhead applied during January 2010.[2 marks]

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