IGCSE Accounting Paper-2: Specimen Questions with Answers 164 - 167 of 189

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Passage

Ankita is a manufacturer. Her financial year ends on 31st March. She sells her output at 30 % mark up.

She provided the following information for the year ended 31st March 2019.

She Provided the Following Information for the Year Ended 31st March 2019
$
Prime Cost25000
Factory Overheads4200
Cost of production20800

Question 164 (2 of 5 Based on Passage)

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One Liner▾

State any two items which included under ‘Factory Overheads’ . (Marks 2)

Explanation

(i) Factory Electricity

(ii) Depreciation on Factory Fixed Assets

  • Factory Overheads are those indirect expenses which are related to the factory in which the product is manufactured. For an item to be categorized under factory overheads, should have two main things-
    • Firstly, it should be indirect expense, i.e.. . cannot be directly attributed to the product.
    • Secondly, it should be incurred until the production or manufacturing process.

Question 165 (3 of 5 Based on Passage)

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One Liner▾

What is meant by ‘Prime Cost’ ? (Marks 1)

Explanation

Prime Cost is the sum total of all the direct expenses incurred to manufacture a product.

Question 166 (4 of 5 Based on Passage)

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Short Answer▾

Calculate the estimated gross profit for the year if the new machine is purchased. (Marks 4)

Explanation

Calculate the Estimated Gross Profit for the Year if the New Machine is Purchased
$
Prime Cost32500
Factory Overheads5200
Cost of Production37700

Question 167 (5 of 5 Based on Passage)

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Write in Brief

One Liner▾

Calculate the gross profit for the year ended 31st March 2019. (Marks 1)

Explanation

Ankita is planning to purchase a new machine costing $ 10,000. Also, she can invest additional capital of $ 4000.

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