Summary
Summary Advanced Diploma In Accounting Sciences (MAC3761)
- Institution
- University Of South Africa (Unisa)
MAC3761 Assignment 2 2021
[Show more]
Content preview
MAC3761 Assignment 2 UNIQUE NO 856611 OF 2021MAC3761 ASSIGNMENT 2 OF 2021
UNIVERSAL SOLUTIONS AND TUTORIALS
NOTE THAT THIS ASSIGNMENT SHOULD BE
PRESENTED IN OWN WAY AS THERE IS RISK
OF PLAGIARISM, HENCE TREAT IT AS A GUIDE
TO CREATING YOUR OWN SOLUTION
QUESTION 1
(a) Revised Income Statement for the Cover Division for the year ended 31 March
2022
Instaheat Grillmaster Total
Covers Covers
R R R
Sales [(𝟏𝟎 𝟎𝟎𝟎 ∗ 𝟐𝟓𝟎); (𝟏𝟐 𝟎𝟎𝟎 ∗ 𝟐𝟑𝟕. 𝟓𝟎)] 2 500 000 2 850 000 5 350 000
Less Variable Cost of Sales (1 793 818) (2 256 182) (4 050 000)
Direct labour 950 000 1 140 000 2 090 000
Direct materials 700 000 910 000 1 610 000
Variable based on labour hours (𝐶1) 112 000 168 000 280 000
Variable based on number of batches (𝐶2) 31 818 38182 70 000
Contribution 706 182 593 818 1 300 000
Less Specific fixed costs (300 000) (425 000) (725 000)
Net profit by product 406 182 168 818 575 000
Less General FMO 375 000
Net Profit 200 000
Calculations
C1. Variable based on labour hours
8 000
Instaheat covers = (20 000 ∗ 280 000) = 𝑹𝟏𝟏𝟐 𝟎𝟎𝟎
12 000
Grillmaster covers = (20 000 ∗ 280 000) = 𝑹𝟏𝟔𝟖 𝟎𝟎𝟎
, C2. Variable based on number of batches
Number of Batches
Batches
10 000 200
Instaheat ( )
50
12 000
Grillmaster ( ) 240
50
440
200
Instaheat covers =( ∗ 70 000) = 𝑹𝟑𝟏 𝟖𝟏𝟖
440
240
Grillmaster covers = (440 ∗ 70 000) = 𝑹𝟑𝟖 𝟏𝟖𝟐
(b) Original budget absorption costing profit statement
Instaheat Grillmaster Total
Covers Covers
R R R
Sales Less Variable Cost of Sales 2 500 000 2 850 000 5 350 000
(2 172 000) (2 978 000) (5 150 000)
Direct labour 950 000 1 140 000 2 090 000
Direct materials 700 000 910 000 1 610 000
Manufacturing overheads 522 000 928 000 1 450 000
Profit / (Loss) 328 000 (128 000) 200 000
The revised profit for instaheat covers increases by R78 182 (406 182 − 328 000)
whilst the grillmaster increases by R296 818 from a loss of (R128 000) to a profit of
R168 818 if the revised budget is used. These increases result from not allocating
the fixed production overheads. The revised budget means that the grillmaster
covers should not be discontinued as they provide a contribution of R168 818
towards the common fixed costs. If the product is discontinued, all other things held
constant, the overall profit of the company will reduce to R31 182 as all the
overheads will now be absorbed by a single product.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Khutedi. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R50,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53022 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now