Cost Accounting is a core part of Grade 12 Accounting Paper 2 and is tested every year. In 2024, Question 4 covered two key areas:
- Calculations involving direct materials, direct labour, and factory overheads
- Interpretation of unit costs, break-even point, and production levels
While many learners performed well in the basic calculations, the report shows that most candidates struggled with the interpretation and adjustments, especially where context changed slightly or when two-step working was required.
This guide from StudyPapers.co.za helps you avoid those exact errors and explains how to score full marks in Accounting Cost Accounting questions.
How to Answer Accounting Cost Accounting Questions Like a Pro
1. Always include wastage in raw material calculations
In Q4.1.1, learners were asked to calculate raw materials used. Most managed the calculation but left out the 10 percent wastage, even though it was clearly stated in the question. This cost marks that should have been easy to earn.
Whenever you are working with direct materials, remember to include wastage, especially when it is given as a percentage. This is standard in Accounting Cost Accounting calculations.
2. Show every step when calculating labour costs
In Q4.1.2, learners had to calculate the labour cost, including:
- The hourly rate
- Hours worked by a resigned worker
- Overtime payment for three workers
Most learners lost marks by skipping steps. Some did not convert the basic monthly salary to hourly rate. Others could not calculate overtime correctly because they did not follow through the full breakdown.
If the question gives salaries and working hours, start by calculating the normal hourly rate. Then apply it to all relevant workers, and only then add the overtime amount. Show each step clearly to collect all method marks.
3. Know how to adjust factory overheads properly
In Q4.1.3, you had to adjust:
- A portion of the clerk’s salary allocated to the factory
- A correction to rent expense
To calculate this, learners had to convert the monthly salary to annual, and then apply the correct percentage. But many skipped that first step and lost the marks.
The rent correction was also poorly answered. You were supposed to do the rent calculation twice, with old and new data, and then subtract to get the correction. Learners who tried to do it all in one line did not get full marks.
In Accounting Cost Accounting, questions often test your ability to process information from different periods. Always compare old and new values separately before making adjustments.
4. Break-even point must be compared to production, not to itself
In Q4.2.1, learners were asked to comment on the business’s performance in relation to the break-even point. Many compared break-even point to break-even point, or production to production, instead of comparing break-even point to actual units produced.
The examiner wants to know whether the business made a profit or a loss. The answer must be based on whether the number of units produced is higher or lower than the break-even point. This is a common question, and it has been asked in past papers repeatedly. Yet learners are still not getting it right.
5. Do not comment on just one part of the question
In Q4.2.2, you were asked to comment on both the gross profit and selling price. Many learners only commented on one of these and lost half the marks.
When the question says “comment on both,” you must respond to both elements of the question. This is not optional. You must compare and explain both factors clearly, not just mention one.
6. Identify the correct costs in your explanation
In Q4.2.3, learners had to identify three different cost components:
- Direct materials cost
- Total fixed cost
- Selling and distribution cost
Most were able to identify direct materials, but could not point out fixed costs or selling and distribution expenses. Others wrongly included direct labour cost, even though the question specifically focused on costs that would not increase the selling price.
Understanding which costs are fixed, variable, or semi-variable is essential for interpreting cost patterns and pricing decisions in Accounting Cost Accounting.
7. Apply the break-even formula backwards when required
In Q4.2.4, you had to work out the selling price per unit using the break-even formula. This is not difficult if you know how to rearrange the formula.
The mistake learners made was treating the formula as something fixed, with only one use. The examiner gave you all other values. You were supposed to use the formula in reverse to calculate the missing selling price per unit.
This skill is essential if you want to go beyond just filling in formulas and start actually solving for unknowns.
How to Prepare for Accounting Cost Accounting Questions
To succeed in this question, you need more than just textbook practice. You need to:
- Practise full cost component calculations, including raw materials, labour, and factory overheads
- Adjust for returns, wastage, and split salaries when calculating total costs
- Show your working for every step, especially when working with percentages or overtime
- Learn to use the break-even formula flexibly, not just as a fixed-format answer
- Comment on multiple items clearly when asked, especially in interpretation questions
At StudyPapers.co.za, we help Grade 12 learners break down the full Accounting Cost Accounting question with practical step-by-step explanations and worked past paper examples.
Cost Accounting is a scoring section in Paper 2 if you stop guessing and start applying. Understand the structure, practise the calculations, and write clear, logical comments. That is how you pass this question.
If you are looking for Accounting Grade 12 past papers, click here