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MAC2601 EXAM PACK 2025 {DETAILED QUESTIONS AND ANSWERS }
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MAC2601 EXAM PACK 2025 {DETAILED QUESTIONS AND ANSWERS }
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lOMoARcPSD|49074884MAC2601/Oct/Nov/2019
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MAC2601/Oct/Nov/2019
DETAILED QUESTIONS AND ANSWERS
QUESTION 1 (MULTIPLE-CHOICE: TWO (2) MARKS PER QUESTION)
Questions 1 - 2 relate to the following scenario:
Vulombe (Pty) Lt is a manufacturer of three joint products and a by-product. The following
information is available for the year ended 30 April 2019:
Kilograms produced
Joint Product 1: Muesli 50 000
Bars
Joint Product 2: 60 000
Health Shake Mix
Joint Product 3: 40 000
Camp Mix
By-product: Bird seed 5 000
A regular market exists for the by-product and therefore the joint costs for the year ended 30
April 2019 has been reduced by the net realisable value of the production of the by- product to a
net joint cost of R380 000.
After the year-end of 30 April 2019, Vulombe (Pty) Ltd changed the recipe that it uses for the
mixture that exists before the split-off point. It has been discovered that the by-product from the
new production process will be harmful to birds due to the presence of a particular artificial
sweetener that is safe for human consumption but not for animal consumption.
1. The net joint costs allocated to Joint product 2 (Health Shake Mix) for the year
ended 30 April 2019 according to the physical standard method of allocating
joint costs to products, will be:
a. R126 666,67.
b. R147 096,77.
c. R150 000,00.
d. R152 000,00.
2. The following statement regarding the Bird Seed is correct:
a. The company should immediately destroy all unsold Bird Seed that were
manufactured before 30 April 2019.
b. Continue to sell Bird Seed from the new production unless laws and regulations
require otherwise.
c. If the company decides not to sell Bird Seed anymore, the Bird Seed will be
regarded as waste products.
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d. In principle, the disposal cost of scrap products will be subtracted from joint costs
before net joint costs are allocated to the relevant products.
3. Assume that a company has an economic order quantity of 3 000 units, places
15 orders per year and incurs a variable ordering cost of R100 per order. The
following statement is correct:
a. Annual usage (annual demand) will amount to 200 units.
b. Total ordering costs for the year will be R300 000.
c. The EOQ is where the number of orders and the holding costs are equal to each
other.
d. Variable carrying costs in total for the year can be calculated based on average
inventory of 1 500 units multiplied by the variable inventory holding costs per annum
per unit.
4. The following statement regarding labour is incorrect:
a. An overtime premium is only the additional amount paid over and above the normal
rate/time.
b. The net wage payable to an employee amounts to the taxable income of the
employee plus all the sundry deductions associated with the employee.
c. Cost to company will include the employer’s contribution to the employee’s medical
aid but will exclude the employee’s own contribution to his/her medical aid.
d. The salary or wage of the factory supervisor is an example of indirect labour costs
and will be included in manufacturing overheads.
5. The following statement regarding budgets is incorrect:
a. If the actual selling price per unit is more than the budgeted selling price per unit,
the variance between the actual sales value and the sales value as per the flexible
budget will be favourable to the company.
b. If the direct material cost of a company in terms of its flexible budget is less than the
direct material cost in terms of its fixed budget, the resulting variance between the
flexible and the fixed budget will be favourable to the company.
c. A flexible budget should use the actual production volume in calculating costs.
d. If actual production equals budgeted production, wage negotiations resulting in a
higher actual labour rate per hour than planned for (in terms of the budget), will
result in an unfavourable variance between the flexible and the fixed budget in
terms of labour costs.
6. The following statement regarding decision trees is incorrect:
a. A decision tree can be used to help management make decisions if some
conditions of uncertainty exist.
b. In a decision tree, an uncontrollable event will be represented as a node.
c. A branch of a decision tree can never connect two event nodes to each other.
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d. Probability refers to the chance that a future event will result in a specific outcome
or range of specific outcomes.
Question 7 relates to the following scenario:
A Nyelekati (Pty) Ltd accountant is drawing up a decision tree to help management decide
whether or not to add a new product to its current range of products. If the product is added
to the current range of products, one of three things could potentially happen:
External event Probability associated with Conditional profit/(loss)
possible outcome from new product
Exchange rates deteriorate 50% (R50 000)
Exchange rates remain the 30% R100 000
same
Exchange rates strengthen ? R180 000
7. The expected value of profit/(loss) if the new product is added to the current range of
products will be:
a. R41 000 profit.
b. R91 000 profit.
c. R50 000 loss.
d. R230 000 profit.
Question 8 relates to the following scenario:
The warehouse clerk of Tsakani Ltd presents you with the following information for the
calculation of closing inventory for the month-end process of September 2018:
Date Transaction details
Sep
1 Opening inventory 275 units @ R1,65 each
12 Purchased 825 units @ R1,98 each
23 Issued 330 units to production
29 Purchased 550 units @ R2,09 each: Freight charges of R165 were
paid for this order.
No physical stock count has been held yet.
8. If the value of closing inventory on the 23 rd of September was calculated as R1 524,60,
then it means that the following valuation method has been used:
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