Practice questions:
Julies Jardinieres manufactures a range of ornamental plant pots. The business plans to produce 2.000 units over the next month. Each variety takes about the same amount of materials and time to produce. Costs for the month are as follows:
£
Rent.
Factory 500
Office 100
Rates:
Factory 300
Office 100
Sand 1,000
Power 700
Light and heat:
Factory 2,000
Office 1,300
Wages:
Operators 10,000
Maintenance staff 1,500
Canteen staff 2,500
Cement 5,000
Depreciation:
Office equipment 500
Moulds 2,200
Fixtures and fittings 800
Salesmen's salary and commission 2,200
Delivery expanses 500
Office salaries 1,800
Cement mixer repairs 900
Salesmen's car expenses 1,100
Finishing paint 200
Packing 800
Julie. the owner of the business. finds the list of information somewhat confusing and asks if you can draw it up in a more structured format. identifying important figures and explaining what they mean.
Prepare a report for Julies Jardinieres which provides the following financial information for the costs in total and per pot. and explain any terms used:
a. Prime cost
b. Production cost
c. Total cost
d. Administration overheads
e. Selling overheads
f. Distribution overheads.