ASSESSMENT 2026
UNIQUE NO.
DUE DATE: APRIL 2026
,Principles of Management Accounting - MAC2601
QUESTION 1
STEP 1: GIVEN INFORMATION
Selling price per unit = R400
Variable costs per unit:
Direct materials = R120
Direct labour = R80
Variable manufacturing overhead = R60
Variable selling & admin = R25
Total variable cost per unit:
= 120 + 80 + 60 + 25
= R285
Contribution per unit:
= Selling price – Variable cost
= 400 – 285
= R115
Fixed costs:
Fixed manufacturing overhead (actual) = R1 800 000
Fixed selling & admin = R500 000
,Units:
Opening inventory = 5 000
Produced = 19 000
Total available = 24 000
Closing inventory = 2 000
Units sold:
= 24 000 – 2 000
= 22 000 units
STEP 2: DIRECT COSTING
Important:
Under direct costing:
Product cost = DM + DL + VMOH
= 120 + 80 + 60 = R260
Variable S&A is treated separately
(a)(i) DIRECT COSTING INCOME STATEMENT
Sales:
= 22 000 × 400
= R8 800 000
, Variable costs:
Cost of goods sold:
= 22 000 × 260
= R5 720 000
Variable selling & admin:
= 22 000 × 25
= R550 000
Total variable cost:
= 5 720 000 + 550 000
= R6 270 000
Contribution margin:
= 8 800 000 – 6 270 000
= R2 530 000
Fixed costs:
Fixed manufacturing overhead = 1 800 000
Fixed selling & admin = 500 000
Total fixed costs = R2 300 000