a) Included in the prior period (2010) figure for cost sales is a movement of R1.5 million relating to direct labour and manufacturing overhead costs. These costs were allocated to the opening balances of inventory for the prior period (2010) figure using a historic allocation rate. The A-G was unable to obtain the assumptions made to determine the reasonableness of the rate used; and b) Costs relating to the production of items sold during the prior year have been incorrectly classified as operating expenditure. As a result, cost sales is understated by R1.839 million.