UNIVERSITY OF LIMPOPO
FACULTY OF MANAGEMENT AND LAW
SCHOOL OF ACCOUNTANCY
DEPARTMENT OF FINANCIAL MANAGEMENT
MODULE: CMAC022 PAPER: P1
(MANAGEMENT ACCOUNTING AND FINANCE IIB)
TIME: 3 HOURS MARKS: 100
INTERNAL EXAMINER: MR.G. RAMAVHEA
SECOND EXAMINER: MRS.M. J MAHWAI
THIS PAPER CONSISTS OF …6…PAGES INCLUDING COVER PAGE
INSTRUCTIONS:
1. Answer all the questions.
2. Write neatly and legibly.
CMAC022 SICK TEST 2 2025
QUESTION ONE {15 MARKS}
Mavoda (Pty) Ltd is a company that manufactures and sells a specialised cordless telephone for high
electromagnetic radiation environments. In 2025, the company sold 25 000 units of cordless telephones
for R600 each. Raw material cost is R200 per unit, five (5) hours of labour is required per unit of cordless
telephone at a rate of R40 per hour, variable manufacturing overhead cost is estimated at R100 per unit.
Fixed costs are expected to be R2 400 000 per annum.
REQUIRED:
I. Differentiate between Product and period cost. {4}
Calculate the following:
I. Break-even point in units and sales value for the cordless telephone. {6}
II. Margin of safety in both value and percentage. {4}
Communication: Logic and understanding of break-even concept. {1}
Total: [15]
QUESTION TWO {20 MARKKS]
Rolindela (Pty) Ltd uses process costing system. The following data concerns the operations of the
company's first processing department for the recent month of September 2025.
Beginning work in process:
Units in process 300
Per cent complete with respect to materials: 60%
Per cent complete with respect to conversion: 60%
Ending work-in-process:
Units in process 500
Per cent complete with respect to materials: 50%
Per cent complete with respect to conversion: 20%
Units started and completed:
Units started into production during the month: 22 000
Units completed and transferred out: ?
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CMAC022 SICK TEST 2 2025
REQUIRED
Differentiate the following:
I. Job costing and process costing. {4}
II. Normal overtime, special overtime, and normal working time. {6}
III. Prepare statement of equivalent completed unts for the month of September 2025. {10}
Total: [20]
QUESTION THREE {20 MARKS}
Kiefer (Pty) Ltd which manufactures only one product has provided you with the following data concerning
its operations for September 2025:
Selling price R133
Units in opening inventory 600
Units produced 6 600
Units sold -
Units in closing inventory 400
R
Variable costs per unit:
Direct materials 34
Direct labour 52
Variable manufacturing overhead 2
Variable selling and administrative 11
Fixed costs:
Fixed manufacturing overhead 158 400
Fixed selling and administrative overheads 61 200
Additional information:
1. The company produces the same number of units every month, although the sales in units vary
from month to month.
2. The company's variable costs per unit have been constant from month to month.
3. The fixed manufacturing overheads and the fixed selling and administrative overheads for August
2025 were R140 000 and R51 200 respectively.
4. The units produced and units sold for August 2025 were 7 000 and 6 400 respectively.
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CMAC022 SICK TEST 2 2025
5. The company uses the first-in-first-out method for inventory valuation.
6. Fixed overheads are allocated to production based on units produced.
REQUIRED:
I. Define Variable costing system. {1}
Prepare the following: Please note show all calculations.
II. The income statement for the month of September 2025, using absorption. {15}
III. The reconciliation between absorption profit and Variable costing system. {4}
Total: [20]
QUESTION FOUR {30 MARKS)
Naran Ltd manufactures three products: A, B and C. The director of Naran is worried about the allocation
of overheads. He is not convinced that the current allocation method that is based on machine hours
allocates them accurately. However, he has recently heard about the concept of activity-based costing and
wants to try it. The following information is available:
Direct costs:
Direct materials R2000 000 R700 000 R500 000 R800 000
Direct Labour R1000 000 R350 000 R450 000 R200 000
Total direct costs R3000 000 R1 050 000 R950 000 R1 000 000
Overheads:
Department Costs
Machine department R 800 000
Purchase department R 135 000
Selling department R 250 000
Total Costs R1 185 000
Cost driver activities:
Activities A B C
Units manufactured 400 280 220
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CMAC022 SICK TEST 2 2025
Labour hours 1 500 2 500 3 000
Machine hours 2 500 1 500 3 000
Purchase orders 700 800 1 500
Production runs 2 000 2 000 1 000
Kilometres driven by 30 000 30 000 20 000
sales reps
Additional information:
• Selling price per unit: Product A = R8 500; Product B = 7 500; Product C= R 11 000.
REQUIRED:
I. Differentiate between Traditional and ABC costing system. {4}
II. Using machine hours as a basis for allocating overheads, calculate the unit cost of
{7}
products A, B and C.
III. Calculate unit cost for all three products Using activity-based costing system. {7}
A, B, and C.
IV. Calculate the net income per unit under each of the two methods used in required II and {7}
required III and show the most profitable product under each method.
V. On point form describe objectives and weaknesses of ABC costing system. {5}
Total: [30]
QUESTION FIVE {15 MARKS}
Beebe and Gardner (Pty) Ltd, makes furniture using the latest automated technology. The company uses
a job-order costing system and applies manufacturing overhead costs to products because of machine
hours. The following estimates are available at the beginning of 2025:
Machine hours 75 000 Hours
Manufacturing overhead costs R900 000
During the year, an oversupply of furniture on the market resulted in cutting back production and a build-up
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CMAC022 SICK TEST 2 2025
of furniture in the company’s warehouse. The company has cost records revealed the following actual cost
and operating data for 2025:
Machine-hours 60 000 Hours
Manufacturing overhead costs R850 000
REQUIRED:
Differentiate the following:
I. Manufacturing and no manufacturing costs. {2}
II. Over and under applied overheads. {2}
III. Indirect material, Indirect labour and sunk cost. {3}
Calculate the following:
I. Predetermined overhead rate. {3}
II. Under or over applied overhead.
{4}
Communication: Presentation and logic.
{1}
Total: [30]
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