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MAC3701 EXAM PACK 2024/2025
- Institution
- University Of South Africa (Unisa)
MAC3701 EXAM PACK 2024/2025 QUESTIONS WITH WELL DETAILED ANSWERS, DRAWN FROM RECENT PAST PAPERS. GOOD FOR EXAM PREPARATION.
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lOMoAR cPSD| 18998289, lOMoAR cPSD| 18998289
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MAC3701
May/June 2023
UNIVERSITY EXAMINATIONS
May/June 2023
MAC3701
Application of Management Accounting Techniques
100 Marks
Duration 3 Hours
This paper consists of 8 pages (including this page and the Invigilator App instructions).
Instructions:
1. All questions must be answered, and all calculations must be shown.
2. This is a closed-book examination; hence, you may not refer to any of your study material, notes,
the internet, etc. during the examination.
3. Ignore taxation and the time value of money.
4. Please ensure you have carefully read and follow the instructions provided in:
• Tutorial letter 104
• The Invigilator App documents
• “Examination instructions” document provided with your timetable on myUnisa
• May/June 2023 examination rules
5. You are reminded that you should make use of the Invigilator App, about which you will find more
information on the next page.
PROPOSED TIMETABLE
Marks Minutes
Question 1: Topics
Direct and absorption costing; Overhead allocation; Margin of safety;
100 180
Standard costing; Ethical, social, business and other related matters; Joint and
by-product costing; Relevant costing and Target costing.
Converting your answers to a PDF file and successfully uploading your one PDF
file. (You must successfully submit your PDF file before 11:30, South African 30
time, 22 May 2023.)
100 210
CONFIDENTIAL [TURN OVER]
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,QUESTION 1 (100 Marks; 180 Minutes)
ZAKokoa Ltd (“ZAK”) consists of two divisions, namely a cocoa bean processing plant (“CBean”) and a cocoa-
based hot drink producer (“HotD”). The divisions are managed by independent management teams that are
responsible for all decisions affecting their respective divisions. Both production plants are situated near Cape
Town in the Western Cape. ZAK has a 31 March financial year-end; uses an absorption costing system; and
values all its inventory items using the first-in-first-out (FIFO) method.
ZAK’s annual profit targets for both the 2024 and the 2023 financial years are:
Targets Division
CBean HotD
Gross profit margin 40% 30%
1 HOT DRINK PRODUCER (“HotD”)
HotD produces and sells two types of cocoa-based hot drinks namely, basic hot chocolate (“Basic”) and luxury
hot chocolate (“Lux”). Cocoa powder, full cream milk powder, artificial filler powders, and sugar are combined to
produce Basic hot chocolate powder and cocoa powder, full cream milk powder, and sugar are combined to
produce Lux hot chocolate powder. One unit of Basic contains 500 grams (g) of basic hot chocolate powder
packaged in a non-recyclable plastic container, while one unit of Lux contains 300 g of luxury hot chocolate
powder packaged in a recyclable pouch.
HotD’s annual maximum production capacity is 130 tonnes of Basic hot chocolate powder and 42 tonnes of Lux
hot chocolate powder.
1.1 BUDGETED AND ACTUAL MANAGEMENT INFORMATION FOR THE 2023 FINANCIAL
YEAR
The information in the following two tables was extracted from HotD’s systems:
Details Basic Lux
Budgeted sales and production units ? ?
Actual units sold 254 000 125 000
Actual units produced 255 840 134 000
Standard labour clock minutes per unit 12 15
Actual labour clock minutes per unit 10,8 15,6
Actual labour work minutes per unit 10,4 15,3
Budget per unit for powder produced Basic Lux
Details Quantity R per Quantity R per
per unit unit per unit unit
, lOMoAR cPSD| 18998289
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MAC3701
May/June 2023
Cocoa powder 100 g ? 80 g ?
Full cream milk powder 170 g ? 120 g 4,80
Artificial filler powders 80 g ? - -
Sugar 150 g ? 100 g ?
Total 500 g 300 g
QUESTION 1 (continued)
Additional information relating to the above management accounts:
1.1.1 HotD budgeted to produce at the annual maximum production capacity for the financial year and
to sell all units produced.
1.1.2 There was no actual and budgeted opening inventory of any type for the 2023 financial year.
1.1.3 There was no actual and budgeted closing direct raw material inventory of any type for the 2023
financial year.
1.1.4 No actual or budgeted normal losses of material occurred in the production process.
1.1.5 The budgeted and actual selling price per unit for Basic was R65. Due to increased competition in
the luxury hot chocolate market, the actual selling price per unit of Lux was R67,50, which was 10%
lower than the budgeted price.
1.1.6 The cocoa powder’s budgeted purchase price was R70 000 per tonne and its actual purchase
price was R72 000 per tonne.
1.1.7 The actual full cream milk powder purchase price was R42 000 per tonne.
1.1.8 The budgeted sugar purchase price was R12 000 per tonne and the actual sugar price was R11
000 per tonne. The high sugar content in products such as hot chocolate, which is loved by children,
recently came under the spotlight for increasing obesity, especially in children.
1.1.9 To bulk up the content of Basic while reducing costs, HotD uses artificial filler powders. The
actual and budgeted price per tonne was R2 000. These filler powders made news headlines recently
for stunting the growth of children.
1.1.10 The purchase prices (both budgeted and actual) for plastic containers and pouches were R1 per
container and R0,50 per pouch.
1.1.11 In an attempt to curb the actual production costs per unit of Lux, the quantity of cocoa powder
used was reduced from the budget quantity to the actual quantity of 65 g per unit. As a result, the
sugar content was increased by 5 g per unit from the budget and the milk powder by 10 g per unit
from the budget. To save costs, the ingredient information on the pouches was not updated to reflect
the change in the mix of ingredients.
1.1.12 For Basic, the actual quantity and mix of direct raw material per unit were as planned for in the
budget.
1.1.13 The standard idle time allowance for direct labour is 5%. The total budgeted direct labour cost
for the 2023 financial year was R3,12 million for Basic and R2,1 million for Lux.
CONFIDENTIAL [TURN OVER]
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