Exam (elaborations)
MAC3701 ASSIGNMENT 1 SEMESTER 2 OF 2023
- Institution
- University Of South Africa (Unisa)
Detailed memo with calculations.
[Show more]
1 review
By: 44652879F • 1 year ago
Content preview
MAC3702 ASSIGNMENT 1 0F SEMESTER 2 OF2023
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
120
LowP (28 000 * ) 56 000
60
150
HighP (30 000 * ) 75 000
60
131 000
ACCADEMIC NEEDS CONTACT INFO@UNITUTORIALS.CO.ZA/0651609781
,Fixed manufacturing overheads allocation rate per direct labour clock hour
𝑇𝑜𝑡𝑎𝑙 𝑏𝑢𝑑g𝑒𝑡𝑒𝑑 fi𝑥𝑒𝑑 𝑚𝑎𝑛𝑢f𝑎𝑐𝑡𝑢𝑟i𝑛g 𝑜𝑣𝑒𝑟ℎ𝑒𝑎𝑑𝑠
=
𝑇𝑜𝑡𝑎𝑙 𝐵𝑢𝑑g𝑒𝑡𝑒𝑑 𝑑i𝑟𝑒𝑐𝑡 𝑙𝑎𝑏𝑜𝑢𝑟 𝑐𝑙𝑜𝑐𝑘 ℎ𝑜𝑢𝑟𝑠
655 000 * 12
=
131 000
= 𝑅60 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.
ACCADEMIC NEEDS CONTACT INFO@UNITUTORIALS.CO.ZA/0651609781
, 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
108
Allocated overheads: LowP (80 * 25 000 * ) 3 600 000
60
156
Allocated overheads: HighP (80 * 34 000 * ) 7 072 000
60
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:
ACCADEMIC NEEDS CONTACT INFO@UNITUTORIALS.CO.ZA/0651609781
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 Ian09. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R100,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
70055 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now