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QUESTION ONE

Information:

November	TRANSACTIONS	NUMBER OF UNITS AND COST
01	Opening inventory	1260 units @ R11 per unit
08	Purchased from supplier	3150 units @ R12
12	Issued to production	2310 units
19	Returned to supplier	525 units (purchased on 08 November)
22	Purchased from supplier	1575 units @ R13
28	Issued to production	2625 units

1.1 Use the transactions of Stark Industries to determine the value of the closing stock using the first- in- first out method. This stock consists of a component used in production of the final product.(10 marks)

QUESTION TWO

The following information relates to the only product made by Mario Traders for the year ended 31 July 2022: Opening inventory 0

Number of units manufactured 945 000

Number of units sold (at R310 per unit) 756 000

Direct materials cost per unit R94

Direct labour cost per unit R123

Variable manufacturing overheads cost per unit R92

Variable selling expenses per unit R22

Fixed manufacturing overheads cost R18 900 000

Fixed selling and administrative expenses R15 750 000

Draft the income statement for the year ended 31 July 2022 using the Marginal Costing method (10 marks)

Draft the income statement for the year ended 31 July 2022 using the Absorption costing method (10 marks)

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