UNIVERSITY OF SOUTH AFRICA (UNISA)
College of Accounting Sciences
⋄
MAC3701
Compulsory Assessment 2 – Semester 1, 2026
⋄
Module Code: MAC3701
Module Name: Application of Management Accounting
Techniques
Assignment No.: 2
Due Date: April 2026
Semester: Semester 1, 2026
Submitted in partial fulfilment of the requirements for MAC3701
at the University of South Africa.
,UNISA | MAC3701 Assessment 2 – S1 2026
Part A – Processing Division Income Statement (December 2025)
A-a: Actual Statement of Profit or Loss for December 2025
Working 1: Output volumes
Product Yield per coconut Coconuts Total output
VCO 0.35 litres 220 000 77 000 litres
FCWater 0.45 litres 220 000 99 000 litres
Husk 0.500 kg 220 000 110 000 kg
Working 2: Joint cost accumulation
Cost element Calculation Amount (R)
Raw materials 220 000 coconuts × R18 3 960 000.00
VMO (220 000 ÷ 500)× R440 193 600.00
Labour 220 000 × (12/60) × 90% × R90 3 564 000.00
FMO (actual) Given 150 000.00
Total joint costs 7 867 600.00
Labour note: Clock hours = 220 000 × 12/60 = 44 000 hrs; work hours = 44 000 × (1 − 0.10) =
39 600 hrs; cost = 39 600 × R90 = R3 564 000.
Critical Consideration
The FMO budget was R120 000 but actual was R150 000. The over/under absorption
is reported below the gross profit line and does not form part of the joint cost pool
allocated to products. In the income statement the actual FMO of R150 000 is used.
Working 3: Husk by-product net realisable value
Item Calculation Amount (R)
Husk revenue 110 000 kg × R5.00 550 000.00
Packaging cost 110 000 kg × R1.20 (132 000.00)
Net husk NRV 418 000.00
Page 1 of 19
, UNISA | MAC3701 Assessment 2 – S1 2026
Net joint costs to allocate = R7 867 600 − R418 000 = R7 449 600
Working 4: Physical measure allocation of joint costs
Product Litres Ratio Allocated (R)
VCO 77 000 77/176 3 259 200.00
FCWater 99 000 99/176 4 190 400.00
Total 176 000 1.00 7 449 600.00
Working 5: FCWater further processing cost
FCWater requires additional purification at R12 000 per KL (= R12 per litre).
Further processing cost = 99 000 litres × R12 = R1 188 000
Total cost of FCWater = R4 190 400 + R1 188 000 = R5 378 400
Working 6: Distribution and administration costs
Distribution (regression equation, y = 0.75x + 18 000): x = 77 000 + 99 000 = 176 000 litres
y = (0.75 × 176 000) + 18 000 = 132 000 + 18 000 = R150 000
Administration (annual R3 000 000 ÷ 12 months) = R250 000
Page 2 of 19
College of Accounting Sciences
⋄
MAC3701
Compulsory Assessment 2 – Semester 1, 2026
⋄
Module Code: MAC3701
Module Name: Application of Management Accounting
Techniques
Assignment No.: 2
Due Date: April 2026
Semester: Semester 1, 2026
Submitted in partial fulfilment of the requirements for MAC3701
at the University of South Africa.
,UNISA | MAC3701 Assessment 2 – S1 2026
Part A – Processing Division Income Statement (December 2025)
A-a: Actual Statement of Profit or Loss for December 2025
Working 1: Output volumes
Product Yield per coconut Coconuts Total output
VCO 0.35 litres 220 000 77 000 litres
FCWater 0.45 litres 220 000 99 000 litres
Husk 0.500 kg 220 000 110 000 kg
Working 2: Joint cost accumulation
Cost element Calculation Amount (R)
Raw materials 220 000 coconuts × R18 3 960 000.00
VMO (220 000 ÷ 500)× R440 193 600.00
Labour 220 000 × (12/60) × 90% × R90 3 564 000.00
FMO (actual) Given 150 000.00
Total joint costs 7 867 600.00
Labour note: Clock hours = 220 000 × 12/60 = 44 000 hrs; work hours = 44 000 × (1 − 0.10) =
39 600 hrs; cost = 39 600 × R90 = R3 564 000.
Critical Consideration
The FMO budget was R120 000 but actual was R150 000. The over/under absorption
is reported below the gross profit line and does not form part of the joint cost pool
allocated to products. In the income statement the actual FMO of R150 000 is used.
Working 3: Husk by-product net realisable value
Item Calculation Amount (R)
Husk revenue 110 000 kg × R5.00 550 000.00
Packaging cost 110 000 kg × R1.20 (132 000.00)
Net husk NRV 418 000.00
Page 1 of 19
, UNISA | MAC3701 Assessment 2 – S1 2026
Net joint costs to allocate = R7 867 600 − R418 000 = R7 449 600
Working 4: Physical measure allocation of joint costs
Product Litres Ratio Allocated (R)
VCO 77 000 77/176 3 259 200.00
FCWater 99 000 99/176 4 190 400.00
Total 176 000 1.00 7 449 600.00
Working 5: FCWater further processing cost
FCWater requires additional purification at R12 000 per KL (= R12 per litre).
Further processing cost = 99 000 litres × R12 = R1 188 000
Total cost of FCWater = R4 190 400 + R1 188 000 = R5 378 400
Working 6: Distribution and administration costs
Distribution (regression equation, y = 0.75x + 18 000): x = 77 000 + 99 000 = 176 000 litres
y = (0.75 × 176 000) + 18 000 = 132 000 + 18 000 = R150 000
Administration (annual R3 000 000 ÷ 12 months) = R250 000
Page 2 of 19
