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MAC3761 Exam Pack
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MAC3761 Exam Pack , Exam papers with UNISA suggested solutions
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COLLEGE OF ACCOUNTING SCIENCESDEPARTMENT OF MANAGEMENT ACCOUNTING
TEST 1: 25 APRIL 2022
MAC3761
MANAGEMENT ACCOUNTING III
(40 marks)
2 hours (including 15 minutes download and 30 minutes upload time)
THIS PAPER CONSISTS OF SEVEN (7) PAGES
IMPORTANT INSTRUCTIONS:
Use of a non-programmable pocket calculator is permissible.
This is a closed-book test.
This test question paper remains the property of the University of South Africa.
The answering of this paper:
1. This is a closed-book test.
2. This paper consists of one (1) question.
3. The question and all its sub-sections must be answered.
4. All calculations must be shown.
5. Each sub-section must be commenced on a new (separate) page.
Honesty Declaration:
By submitting my solution to the test, I declare that:
• I know what plagiarism is, that plagiarism is wrong and that disciplinary steps can be
taken against me if I am found guilty of plagiarism;
• This solution, submitted by myself, is my own work;
• I have not assisted any other student in any manner and I have not had the
assistance of any other person, in completing this test;
• I will not assist any other student in any manner and I will not obtain the assistance
of any other person, in completing this test;
• I know that if I am found to be in violation of this declaration I will receive 0% for this
test.
Please note: You do not have to sign the declaration. By submitting your solution, you
automatically declare that you adhere to all the above with regards to this specific
assessment.
CONFIDENTIAL
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, Page 2 of 7 MAC3761
Test 1/April 2022
The Invigilator
• Please note The Invigilator App is not used during Test 1 for MAC3761.
Submission instructions:
Please remember to complete the Honesty Declaration (Part of file submission process
below).
Follow these steps to submit your answer file.
1. Go to https://my.unisa.ac.za/portal and login with your myUnisa credentials i.e. student number
and password.
• Click on myAdmin – Assessments and Assignments View.
• Alternatively, you can access the assignment submission tab from this link directly -
https://stratus.unisa.ac.za/sacdl20/asps/unisa_assignments.asp
• Students who cannot access myUnisa for the test question paper or to upload their answer scripts
should use the following link - https://mooc.unisa.ac.za/portal - CAS Test 1 2022.
Please note that this option must only be used if you struggle to upload or download your script
from myUnisa, as you need to register on the MOOC portal first, before you can continue.
• ATTACH/UPLOAD ANSWER FILE
o A new page will open. Scroll down to the blue Submit button.
o Make sure all your ALL your pages are converted into a single PDF document for
uploading (Make sure the file is not read-only or password protected).
o Click the Choose File button to browse for a file.
o Once you have attached your answer file, the name of the file, as well as the file size and
upload time stamp will be displayed.
o TIP: You may click Remove to remove the attachment if you selected the wrong file on
your device.
• Remember to complete the Honesty Declaration by typing in two separate words “I AGREE”
at the end of the submission process.
• SUBMIT ANSWER FILE
o When you are ready and satisfied that you have the correct answer file, click the Continue
button to complete your assessment submission.
o Be sure to submit on time, before test session ends. Click Cancel to exit the assessment
without saving or submitting.
• Once you have submitted your assessment, you will receive a confirmation message on the
screen.
• Make a screen copy for your records.
• In addition, if you have opted to receive an email notification, you will also receive an email confir-
mation of your submission.
Additional instructions:
• The final submission of your answer script will be on myUnisa or the MOOC platform, and these
two platforms are the only valid submissions that will be accepted by the university.
• No emailed scripts will be accepted.
• Students are advised to preview submissions (answer scripts) to ensure legibility and that the
correct answer script file has been uploaded.
• Student are permitted to resubmit their answer scripts should their initial submission be unsatis-
factory.
• Incorrect file format and uncollated answer scripts will not be considered.
CONFIDENTIAL
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, Page 3 of 7 MAC3761
Test 1/April 2022
• Incorrect answer scripts and/or submissions made on unofficial examinations platforms will not
be marked and no opportunity will be granted for resubmission.
• Mark awarded for incomplete submission will be the student’s final mark. No opportunity for
resubmission will be granted.
• Mark awarded for illegible scanned submission will be the student’s final mark. No opportunity
for resubmission will be granted.
• Submissions will only be accepted from registered student accounts.
• Students suspected of dishonest conduct during the examinations will be subjected to
disciplinary processes. UNISA has a zero tolerance for plagiarism and/or any other forms of
academic dishonesty.
• Students are provided 30 minutes to submit their answer scripts after the official test time.
Submissions made after the official test time will be rejected by the examination regulations and
will not be marked.
The test paper will remain available throughout the session.
Commence the submission (uploading) of your answer file as soon as you have completed the
assessment, do not wait for the session to conclude.
Suggestion: Start uploading your answer file at 10:00 am (90 minutes after the start of the test
session) at the latest, to allow enough time for any delays in the process.
You must submit your answers in one pdf file. The file name of your pdf document must be in the
following format: Student number, space, MAC3761. For example: 33445566 MAC3761.
Your submission will be date stamped and only submissions received up to 10:30 am will be marked.
PROPOSED TIMETABLE:
Marks Time
(minutes)
Question 1: Cost classification; Cost estimation; Budgets, planning
and control; Cost-volume-profit relationships; Direct- and absorption 75
costing systems; Overhead Allocation; Strategy and risk management; 40 (72 plus
Sources and forms of finance; Capital structure and cost of capital; and extra 3)
Ethics.
TOTAL 40 75
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, Page 4 of 7 MAC3761
Test 1/April 2022
QUESTION 1 (40 Marks; 72 Minutes)
Watch-It Ltd (“Watch-It”) started off as a small family business a few decades ago and has grown into
a successful company that manufactures and sells wrist watches (“watches” or “units”) in South Africa.
A large part of the production process involves manual handwork and the watches are made in relatively
small quantities, resulting in a “personal touch” and exclusivity that provides Watch-It with a competitive
advantage. Watch-It uses an absorption costing system; applies the first-in-first-out (FIFO) method to
value all its inventories; and has a 31 March year-end. Watch-It has decided to change its absorption
costing method from traditional absorption costing to activity-based costing (ABC) as from 1 April 2022.
Although all Watch-It’s watches are analog watches (with “hands” and not with a digital display), Watch-
It produces two product types: a traditional-design watch (“Classic”) and a contemporary-design watch
(“Fashion”). The main components of any watch made by Watch-It are one buckle, one leather strap,
one case, and two hands. Except for normal losses already included in the production costs stated
below, no other losses occur in the manufacturing process. No opening or closing inventory of any
materials or work-in-progress exists at the beginning or the end of a period.
1. EXTRACTS FROM REVENUE, COST AND UNIT INFORMATION FOR THE 2022 FINANCIAL
YEAR:
1.1. Watch-It’s actual production costs for the period were as follows:
Cost item Note Classic Fashion
(R per watch) (R per watch)
Buckle 1.1.1 200 ?
Leather band 1.1.2 ? ?
Case 300 240
Two hands 1.1.3 ? ?
Total of direct labour and variable 280 318
manufacturing overheads
Fixed manufacturing overheads (FMO) 1.1.4 ? ?
1.1.1. Both product types use the same type and size of buckle.
1.1.2. Leather straps are hand-made, mainly from a leather band that is pre-cut by the supplier.
Each Classic uses 20 centimetres of leather band and each Fashion uses 24 centimetres
of leather band. The leather band is bought at R400 per metre. All other materials used in
making the leather straps are included in variable manufacturing overheads together with
other small watch parts and other variable overheads incurred in the production process.
1.1.3. Classic uses two basic hands at R60 each, whereas Fashion uses two glow-in-the-dark
hands at R96 each. There is no price difference between the two hands of a specific type of
watch (i.e. a minute hand costs the same as a second hand for a particular product type).
1.1.4. FMO are absorbed based on annual budgeted production units. The predetermined blanket
FMO absorption rate was R360 per unit in the 2021 financial year and in the 2022 financial
year it was based on budgeted FMO of R3 299 400 for the year and total budgeted production
units of 8 460 watches. Actual FMO for the 2022 financial year was R3 010 000.
1.2. Watch-It calculated the following actual variable costing opening inventory values at 1 April
2021 for the purposes of a short-term decision:
Product type Units in inventory Inventory value
Classic 50 R47 000
Fashion 20 R20 000
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