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2 marksCost Elements, Classification and Cost Curves

CAPE Accounting Unit 2 · 2008 · Paper 2 · Question 1(b)(i)

The company receives a special order for 10,000 seatbelts from an automobile manufacturer in Anguilla.

Assuming that Cox Manufacturing Company has the production capacity to fill this order without affecting existing production, list the categories of costs that are relevant to the decision.

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Other parts of this question

  1. 1(a)(i)Compute total direct materials.[2 marks]
  2. 1(a)(ii)Compute total indirect labor.[2 marks]
  3. 1(a)(iii)Compute total factory overhead.[3 marks]
  4. 1(a)(iv)Compute total product cost.[2 marks]
  5. 1(a)(v)Compute total period cost.[2 marks]
  6. 1(a)(vi)Compute total variable manufacturing cost.[2 marks]
  7. 1(b)(ii)Cox Manufacturing will not accept the order if the company will be worse off financially by so doing. Calculate the minimum price that Cox Manufacturing…[3 marks]
  8. 1(c)(i)Calculate the allocation rate for EACH service department.[3 marks]
  9. 1(c)(ii)Calculate the amount of overhead cost that will be assigned to EACH operating department.[14 marks]

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