QUESTION 1 (50 MARKS)
Consider the following information by Writeups Limited, a company that manufactures cardboard
paper, plain white paper and blue margin paper.
WriteUps Limited uses an Activity-Based Costing System in allocating overhead costs to the vario
paper products it manufactures. The following table was given to you by your costing clerk
Prime costs and usage per pad of the product
Cardboard Plain White
Blue Margin
Cost per hd
Machine hours
Labour hours
Paper Pulp
6 minutes
12 minutes
R 75
R 60
3 minutes
5 minutes
250 grams
5 minutes
10 minutes
300 grams
R 25
750 grams
verhead costs are allocated amongst four department: Production department Alpha, Pre
epartment Omega, the Packaging Service department and the Maintenance Service depa
oduction department Alpha is machine intensive and Production department Omega is
tensive. Another costing clerk has prepared the following table for you:​