MAC3701
Assignment 1 Semester 2 2023
Unique Number: 786144
Due Date: 21 August 2023
DISCLAIMER & TERMS OF USE
1. Educational Aid: These study notes are designed to serve as educational aids and should not be considered as a
substitute for individual research, critical thinking, or professional guidance. Students are encouraged to
conduct their own extensive research and consult with their instructors or academic advisors for specific
assignment requirements.
2. Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the
information provided in these study notes, the seller cannot guarantee the completeness or correctness of all
the content. It is the responsibility of the buyer to verify the accuracy of the information and use their own
judgment when applying it to their assignments.
3. Academic Integrity: It is crucial for students to uphold academic integrity and adhere to their institution's
policies and guidelines regarding plagiarism, citation, and referencing. These study notes should be used as a
tool for learning and inspiration, but any direct reproduction of the content without proper acknowledgment and
citation may constitute academic misconduct.
4. Limited Liability: The seller of these study notes shall not be held liable for any direct or indirect damages,
losses, or consequences arising from the use of the notes. This includes, but is not limited to, poor grades,
academic penalties, or any other negative outcomes resulting from the application or misuse of the information
provided.
,MAC3702 ASSIGNMENT 1 0F SEMESTER 2 OF
2023
QUESTION 1
Letsatsi (Pty) Ltd is a manufacturer of solar geysers. The company manufactures two
types of solar geysers, Low-pressure (“LowP”) and High-pressure (“HighP”) solar
geysers. Letsatsi makes use of an absorption costing system and all types of
inventory are valued using the first-in-first-out method (FIFO). The following
information is available for the financial year ended 30 June 2023:
1. There was no actual and budgeted opening inventory of any type for the 2023 financial
year.
2. No actual or budgeted normal material losses occurred in the production process.
3. Letsatsi’s fixed manufacturing overheads (FMO) are allocated based on the budgeted
direct labour clock hours. The total budgeted FMO was R655 000 per month and the total
actual FMO for the year was R9 200 000.
4. The budgeted other fixed administrative costs for the division were R2 358 000 per
annum and the actual other fixed administrative costs were R2 400 000.
The budgeted fixed manufacturing overheads allocation rate per direct labour clock hour for the 2023
financial year is:
Solution
Calculation of Total direct labour clock hours
Hours
LowP 56 000
HighP 75 000
131 000
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Distribution of this document is illegal R13,625 per year?
,Fixed manufacturing overheads allocation rate per direct labour clock hour
=
=
=
QUESTION 2
Letsatsi (Pty) Ltd is a manufacturer of solar geysers. The company manufactures two
types of solar geysers, Low-pressure (“LowP”) and High-pressure (“HighP”) solar
geysers. Letsatsi makes use of an absorption costing system and all types of
inventory are valued using the first-in-first-out method (FIFO). The following
information is available for the financial year ended 30 June 2023:
1. There was no actual and budgeted opening inventory of any type for the 2023
financial year.
2. No actual or budgeted normal material losses occurred in the production process.
3. Letsatsi’s fixed manufacturing overheads (FMO) are allocated based on the budgeted
direct labour clock hours. The total budgeted FMO was R655 000 per month and the
total actual FMO for the year was R9 200 000.
Downloaded by: dtabdb | Want to earn
Distribution of this document is illegal R13,625 per year?
, 4. The budgeted other fixed administrative costs for the division were R2 358 000 per
annum and the actual other fixed administrative costs were R2 400 000.
For question 2 only assume the following:
i. The budgeted fixed manufacturing overheads (FMO) allocation rate per direct
labour clock is R80 per hour.
The total FMO amount included in costs of sales for the 2023 financial year is?
Solution
R
Allocated overheads: LowP 3 600 000
Allocated overheads: HighP 7 072 000
Total allocated overheads 10 672 000
QUESTION 3
Letsatsi (Pty) Ltd is a manufacturer of solar geysers. The company manufactures two
types of solar geysers, Low-pressure (“LowP”) and High-pressure (“HighP”) solar
geysers. Letsatsi makes use of an absorption costing system and all types of
inventory are valued using the first-in-first-out method (FIFO). The following
information is available for the financial year ended 30 June 2023:
Downloaded by: dtabdb | Want to earn
Distribution of this document is illegal R13,625 per year?
Assignment 1 Semester 2 2023
Unique Number: 786144
Due Date: 21 August 2023
DISCLAIMER & TERMS OF USE
1. Educational Aid: These study notes are designed to serve as educational aids and should not be considered as a
substitute for individual research, critical thinking, or professional guidance. Students are encouraged to
conduct their own extensive research and consult with their instructors or academic advisors for specific
assignment requirements.
2. Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the
information provided in these study notes, the seller cannot guarantee the completeness or correctness of all
the content. It is the responsibility of the buyer to verify the accuracy of the information and use their own
judgment when applying it to their assignments.
3. Academic Integrity: It is crucial for students to uphold academic integrity and adhere to their institution's
policies and guidelines regarding plagiarism, citation, and referencing. These study notes should be used as a
tool for learning and inspiration, but any direct reproduction of the content without proper acknowledgment and
citation may constitute academic misconduct.
4. Limited Liability: The seller of these study notes shall not be held liable for any direct or indirect damages,
losses, or consequences arising from the use of the notes. This includes, but is not limited to, poor grades,
academic penalties, or any other negative outcomes resulting from the application or misuse of the information
provided.
,MAC3702 ASSIGNMENT 1 0F SEMESTER 2 OF
2023
QUESTION 1
Letsatsi (Pty) Ltd is a manufacturer of solar geysers. The company manufactures two
types of solar geysers, Low-pressure (“LowP”) and High-pressure (“HighP”) solar
geysers. Letsatsi makes use of an absorption costing system and all types of
inventory are valued using the first-in-first-out method (FIFO). The following
information is available for the financial year ended 30 June 2023:
1. There was no actual and budgeted opening inventory of any type for the 2023 financial
year.
2. No actual or budgeted normal material losses occurred in the production process.
3. Letsatsi’s fixed manufacturing overheads (FMO) are allocated based on the budgeted
direct labour clock hours. The total budgeted FMO was R655 000 per month and the total
actual FMO for the year was R9 200 000.
4. The budgeted other fixed administrative costs for the division were R2 358 000 per
annum and the actual other fixed administrative costs were R2 400 000.
The budgeted fixed manufacturing overheads allocation rate per direct labour clock hour for the 2023
financial year is:
Solution
Calculation of Total direct labour clock hours
Hours
LowP 56 000
HighP 75 000
131 000
Downloaded by: dtabdb | Want to earn
Distribution of this document is illegal R13,625 per year?
,Fixed manufacturing overheads allocation rate per direct labour clock hour
=
=
=
QUESTION 2
Letsatsi (Pty) Ltd is a manufacturer of solar geysers. The company manufactures two
types of solar geysers, Low-pressure (“LowP”) and High-pressure (“HighP”) solar
geysers. Letsatsi makes use of an absorption costing system and all types of
inventory are valued using the first-in-first-out method (FIFO). The following
information is available for the financial year ended 30 June 2023:
1. There was no actual and budgeted opening inventory of any type for the 2023
financial year.
2. No actual or budgeted normal material losses occurred in the production process.
3. Letsatsi’s fixed manufacturing overheads (FMO) are allocated based on the budgeted
direct labour clock hours. The total budgeted FMO was R655 000 per month and the
total actual FMO for the year was R9 200 000.
Downloaded by: dtabdb | Want to earn
Distribution of this document is illegal R13,625 per year?
, 4. The budgeted other fixed administrative costs for the division were R2 358 000 per
annum and the actual other fixed administrative costs were R2 400 000.
For question 2 only assume the following:
i. The budgeted fixed manufacturing overheads (FMO) allocation rate per direct
labour clock is R80 per hour.
The total FMO amount included in costs of sales for the 2023 financial year is?
Solution
R
Allocated overheads: LowP 3 600 000
Allocated overheads: HighP 7 072 000
Total allocated overheads 10 672 000
QUESTION 3
Letsatsi (Pty) Ltd is a manufacturer of solar geysers. The company manufactures two
types of solar geysers, Low-pressure (“LowP”) and High-pressure (“HighP”) solar
geysers. Letsatsi makes use of an absorption costing system and all types of
inventory are valued using the first-in-first-out method (FIFO). The following
information is available for the financial year ended 30 June 2023:
Downloaded by: dtabdb | Want to earn
Distribution of this document is illegal R13,625 per year?
